Here's everything you need to know about Lidl, the German discount chain that's struggling to keep up with Aldi's rapid US growth

• Lidl has about 170 US stores and plans to open more. Its first Manhattan site launched in 2022.

• Lidl operates in a similar format to Aldi, with an emphasis on cutting costs to keep prices low.

• Here's everything you need to know about the grocery chain.

Lidl could follow in the footsteps of discounter rival Aldi

Lidl opened its first US store in 2017, but it's failed to make a splash. Store growth has been slower than the German discount chain expected, and more than five years later it has fewer than 200 stores.

Lidl aims to follow in the footsteps of Aldi, a rival German grocery retailer. Aldi opened its first US store in 1976 and now has more than 2,200 sites.

Real-estate company JLL listed Aldi as the fastest-growing grocer in the US in 2022 for the fourth year running and ranked it as the third-largest by store count after Kroger and Walmart. The chain is loved by bargain hunters, college students, and middle-income shoppers alike.

Lidl operates in a similar format to Aldi, with a focus on cutting costs to keep prices low. Items are sold straight from their delivery boxes, stores are kept compact to make them more efficient, and non-essential services are shunned.

As inflation continues to hit, more shoppers may flock to discount chains like Aldi and Lidl.

Here's everything you need to know about Lidl.

Lidl cuts costs wherever it can to keep prices at rock-bottom

Lidl operates similarly to Aldi, with a focus on keeping prices down by carefully controlling costs.

Lidl's US website says it offers a limited selection of products to ensure it can get them at competitive prices, and about 80% are private label. And because of the limited product range, its stores can be more compact, meaning they're easier for both staff customers to navigate. It says its US stores start at about 15,000 square feet.

Lidl says it keeps overheads "to a minimum" and eliminates "any unnecessary costs." This includes stocking items in the boxes they arrive in, which reduces labor expenses.

The focus in the stores is on efficiency. "Every store features an intuitive layout for a seamless experience," Lidl US says. "As an efficient company, we work according to defined processes and procedure. Our success is ensured by short decision paths and simple work processes."

Lidl has a rotating selection of non-food merchandise, which can range from clothes to kitchenware and electrical appliances. This encourage shoppers to visit regularly to see what that week's bargains are while creating a feeling of exclusivity that pushes people to buy now before the products are gone.

Lidl opened 450 stores in Germany in just 15 years

Lidl's origins date back to the 1930s, when Josef Schwarz joined the tropical fruit wholesaler Lidl & Co and transformed it into a grocery wholesaler.

The business was destroyed in 1944 during the Second World War, but was revived within a decade, according to Manager Magazin.

Josef's son Dieter Schwarz, born in 1939, joined the company after he finished high school, according to Bloomberg.

But it wasn't until decades later, in 1973, that the younger Schwarz restructured the company and opened its first discount store in Ludwigshafen-Mundenheim, inspired by Aldi's success.

Bloomberg reported that he bought the rights to the Lidl name because he couldn't call the business "Schwarzmarkt," which translates from German as "black market." The store sold around 500 product lines.

Dieter Schwarz took over the company as chairman and CEO in 1977 after Josef died.

Lidl's expansion was rapid. By 1988, it had more than 450 stores in Germany and about 5,700 employees.

The next year, it expanded abroad. France was the home of Lidl's first international store. Shortly after, it opened stores elsewhere in Europe, including Italy in 1992 and the UK in 1994.

By 2003, Lidl had more than 80,000 employees across Europe.

In 2006, the retailer launched Lidl Asia, a sourcing arm for the company which has more than 1,000 employees across Hong Kong, China, and Bangladesh. Its roles include production, quality assurance and delivery, though Lidl doesn't have any stores in Asia.

Lidl did not respond to Insider's request for more detailed information on its history.

Lidl launched its online store in 2009. Its since launched its own app, where customers can redeem coupons to get money off their shop.

Lidl Ireland started offering free menstrual products to those affected by period poverty in May 2021 through the Lidl Plus app. The company said this made it the "first major retailer" to start offering free period products nationwide. Lidl Northern Ireland quickly followed up with a similar initiative.

Lidl is part of the Schwarz Group, alongside sister company Kaufland, a hypermarket chain launched by Schwarz in the 1980s. Kaufland now has more than 1,500 stores across Europe, around half of which are in Germany. Lidl is headquartered in Neckarsulm.

Dieter Schwarz is the second-richest German with an estimated fortune of $22 billion

Dieter Schwarz is listed by Bloomberg as the world's 59th-richest person and the second-richest German with an estimated fortune of about $22 billion. His vast fortune even made his hometown, Heilbronn, Germany's richest city in 2014.

Schwarz has pumped huge sums of money into the town, and some have accused him of effectively trying to buy it.

Schwarz is notoriously reclusive. There are very few photos available of him and he refuses to give interviews.

The billionaire withdrew from running the Schwarz Group's operations in 1999 but is still involved in some strategic decisions. Bloomberg reported that he put 99.9% of the company's shares in a foundation, the Dieter Schwarz Stiftung, and 100% of voting rights in a separate operating company.

Lidl's US launch was much slower than expected

Lidl launched in the US in 2017, its first and only market outside of Europe. A company presentation before its US launch described the retailer as a cross between Trader Joe's and Harris Teeter, a grocery chain based in North Carolina.

Lidl's first 20 stores opened in Virginia and the Carolinas in summer 2017 and analysts had high expectations, but its launch in the US was slower than expected.

Forbes reported that it had originally forecast opening 100 stores in its first year of operating but only reached about half this number.

But the company has been picking up the pace. Lidl bought 27 Best Market stores in New York and New Jersey, which it remodeled. It said it would guarantee jobs for the company's staff and offer them wages and benefits "equal to or better than" at Best Market.

Lidl's first New York store open on Staten Island in summer 2018. Its first Manhattan branch opened in early 2022 in Harlem, and its first Brooklyn store is due in 2024.

Lidl said that within three years it won more than 500 awards for our unique products and shopping experience and Food & Wine Magazine designated it the country's sixth-best supermarket in 2020.

The discounter says that it now has more than 170 stores across Georgia, South Carolina, North Carolina, Virginia, Maryland, Washington, D.C., Pennsylvania, Delaware, New Jersey, and New York.

Lidl now has more than 12,000 stores across 31 countries

Lidl reported 114.8 billion euros ($123.1 billion) in sales in 2022, a 13.8% increase year-on-year. It has more than 12,000 stores worldwide, with around 340,000 staff.

Its discount rival Aldi, meanwhile, similarly has more than 12,000 stores across its two businesses, with 2021 net sales of almost 89 billion euros ($94 billion).

Though Lidl is yet to make big waves in the US, its UK business, which has more than 900 stores, is booming. Lidl is ranked as the UK's sixth-biggest supermarket with a 7.7% share in the grocery market, according to data from Kantar.

In Germany, Lidl has about 93,000 employees across some 3,200 stores.

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