EUROPE – Lidl, the German supermarket chain has inaugurated a new US$65.02 million distribution facility in Nova Pazova, Serbia in preparation to open its first stores in the country.

The facility has the capacity to store up to 30,000 pallets with ability to supply about 100 stores once it starts operating to its full capacity.

The center is also equipped five temperature-controlled storage zones to ensure that various products are kept at optimal temperatures, including a dedicated chamber used exclusively for chocolate products.

In addition to about 20 countries in Europe, Lidl has rolled out operations in around 50 stores in six US states and it targets to reach 100 stores in 2018.

According to FoodBev, approximately 180 employees will work at the site, which is one of the largest sites in Southeast Europe to achieve the LEED Gold sustainability certificate due to the site’s incorporation of sustainable building materials, efficient use of water and the creation of better working conditions due to the high indoor air quality and use of natural light.

“Today’s opening of the logistics centre is an important event for Lidl, because we are offering consumers in Serbia a unique shopping experience, fresh and quality products, and the best price/quality ratio.

“For Serbia, this is a confirmation that Lidl comes as a long-term partner, who is there to stay and develop and improve together,” said Lidl Serbia general manager Tomislav Šapina.

Expansion outside Europe quite challenging

After a challenging start in 2018, Lidl revealed plans to scale down its US expansion strategy with a focus on grocery delivery to boost performance.

The FoodNavigator reported that once it entered the retail market in the US last summer, competitors such as Walmart moved to lower prices in local catchments to compete against Lidl’s openings.

In March, Schwarz Group CEO Klaus Gehrig speaking to the Manager, a German publication said the retailer open only 20 new stores in 2018 as opposed to 80 stores announced earlier.

While the US has proved a challenging market for Lidl, where consumers are turning to home delivery service, the firm went ahead to partner with Shipt, an internet-based grocery delivery service to expand grocery delivery.

European expansion and China partnerships

Lidl is rapidly gaining retail ground in Europe despite of challenges in the US after it recently five new stores bringing its UK total to 700 stores.

Serbia is its latest move in expansion while Latvia and other Baltic states are on the list of possible European markets to explore.

In China, Lidl launched its store on Alibaba’s TMall, then opened a flagship storefront JD Worldwide, the overseas shopping platform belonging to featuring Lidl’s European private label brands that is, snacks, health, beauty and personal care products.