The German Grocery
Store Lidl - Another Empty Business in Fredericksburg, Virginia
We have another empty business in Fredericksburg; another
empty building; another eyesore; another business not producing; it’s not employing
people or enhancing the local economy. It is a business that received millions
of dollars in tax incentives from the people of Virginia. It’s an empty German
grocery store called Lidl.
My curiosity got the best of me so I started to dig a little.
This eyesore is not in the typical random dead business lots of Fredericksburg’s
Central Park, Spotsylvania Towne Centre or the near-empty Salem Church Crossing
shopping center. We have a Lidl’s facility at the intersection of Harrison
Crossing and Route 3 in Fredericksburg, Virginia.
The building is new, remains non-functional for almost a
year, and is an eyesore to look at empty. It has a fence with the black tarp
that obscures any view into the facility. It appears to have an onsite security
presence. It once had at least one security camera atop a pole. One person I
talked to in town actually thought the new inert Lidl store was a secret
government facility.
An article from a local paper in Fredericksburg, Virginia,
“Lidl buys another Spotsylvania store site” talked little about job
opportunities for 200 people and alleged greater local economic development.
[1] Virginia
Governor Terry McAuliffe approved a state grant for Lidl to build a U.S. based
headquarters in the Virginia areas of Spotsylvania and Arlington. Virginia leaders approved a
$10-million-dollar package so the business sets roots in Virginia. Plus, Lidl
gets nearly $6-8 million in tax rebates for nearly the next two decades. My question is where’s the gain for the community?
The building has sat there for nearly a year and provides no value to the
community.
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Number of Walmart Stores Worldwide: 11,539
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Number of Lidl Stores Worldwide: 10,000 plus
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Number of Walmart Employees Worldwide: 2.3 Million
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Number of Lidl Employees Worldwide: 315,000
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Number of Countries: 28
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Number of Countries: 28
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Who employs more people per ratio- Walmart or
Lidl?
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Who makes more profit per ratio – Walmart or
Lidl?
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Does this mean Lidl employees are rich? Not
likely, so what is the profit ratio across the Lidl enterprise? What are the
local economic impacts of Lidl stores in the areas they serve?
A Little about Lidl
Lidl is considered one of the more modern types of store; a
store of the future. It is recognized for its business technological
systems-based efficiency and lean business model that leads consumers to prices
that are hard for major grocery stores to compete. Lidl minimizes overhead by
having minimal employee staff, a limited selective inventory of goods, and
well-managed supply chain and distribution practices. Lidl is addressed in a very interesting and
disconcerting November 2015 article by businessinsider.com, "This German
Store That Is a Cross between Walmart and Trader Joe's Is Planning to Take over
America."
[4]
The article title comes off dramatic; it may be. However,
other articles I found surfaced with similar observations and conclusions. A big one being that Lidl may actually
outcompete US grocery stores at a level that may force them to close.
Outcompeting/outperforming businesses is not new. What may be concerning is the
long-term social and economic impact if they are not monitored by the
communities they are supposed to serve. There’s a danger of local unemployment.
Lidl has a small portion of the UK grocery store market at
less than 6%.
[5]
However, Lidl's pricing is outperforming the current grocery store market as incumbent
stores compete to stay relevant. US stores identified as being threatened by
Lidl are Walmart, “Food Lion, Bi-Lo, Winn Dixie, and dollar stores such as
Dollar General and Family Dollar”.
[6] I ask
myself if this is the commercial version of whereby people introduce the
snakehead fish into American waters that destroy US gamefish to the point of
possible extinction?
[7]
In this case, the snakehead is Lidl, the gamefish are US grocery stores.
This sounds great for business, but I have to ask what are
the economic and employment casualty numbers? Lidl does not appear to beat
competitors because their products a better; it appears Lidl is beating
customers because of low employee overhead and efficiency. This is something
communities need to think carefully. The employees of the Giant grocery store
at Harrison Crossing just survived the possibility of losing their jobs from a
store sellout; they may not be so lucky if Lidl becomes operational if the
businessinsider article has any truth to it.
[8]
The Picture that Disturbs Me
One powerful and depressing image of a Lidl store concerns
me potentially reflecting itself in the United States is the article photo by
Reuters
http://static3.businessinsider.com/image/5637bc23bd86ef17008c6749-2553-1915/rtxv1fj.jpg . The photo portrays something out of a depressing
Orwelian 1984ish soviet-style look. You see long food lines with mostly elderly
people in them. You see the store surrounded by a drab colored crowded-looking
apartment complex. Of note, there is
Eastern European writing that seems to make sense for this image, but look at
the other photos in other parts of Europe as well. You don’t see much in terms
of positive human interaction; no happy employees or managers. You see only
cold dreary looking buildings and long lines. I hope similar images don’t
surface in the US.
Though I look forward to Lidl opening a store in the area to
offer consumers lower prices, I do not want to see other grocery stores shut
down and people, to include disabled and elderly employees, lose their jobs due
to being not efficient enough to work in the Lidl model. This appears to be an unintended
consequential form of economic genocide.
Bait and Switch -
American Consumerism and Questionable Future Economic Prospects
Consumers cannot exist unless they have jobs that allow them
to have money to spend…there is a symbiotic relationship here not being
discussed…it appears one-way… will a consumer driven expansion of Lidl kill the
golden goose?
I also ask if American consumerism will enslave itself to building
a foreign economy, while not spending more in American business enterprises?
Despite this, I see potential indicators the weak US economy
and limited job growth makes the US prey to foreign business chains that appear
machine/technology driven, efficient, cold and unconnected. Their focus is
money, and nothing but money. Their
structures appear cold, efficient and matter-of-fact.
My current impression is foreign-owned businesses like Lidl’s
offer low prices in the short-term. However, I wonder if the low food prices
consequently mask a darker side in the long-term. My concerns are loss of local
jobs; unintentional contribution to local economic depression; loss of
community; loss of freedom of choice. Is America falling for an economic bait
and switch buy trading for short-term consumables for long-term permanent
negative impacts on our local economies and culture? In short, I see a potential where American
consumerism may build a foreign economy. Where does this leave US jobs and the
US economy?
Is Lidl a
Foreshadowing of the Global Economy?
Stores like Lidl are just an example of a greater trend
Americans may want to understand in terms of the driving forces of what makes
them successful, and how it portends our future. We talk about global warming.
We don't talk about global firing. Global firing is an extreme term, but
relevant to this topic in order to highlight an issue. I think global firing is
something to think about as all countries are dealing with crazy fluctuations
within their respective economies; a lack of steady jobs, training and
opportunity.
[9]
Much of this is amplified by our ever-improving technologies, some of which are
putting people out of jobs.
[10] Yes,
new types of jobs are surfacing, but the knowledge and education to prepare is
lacking, at least according to the World Economic Forum where they note. People will find themselves behind the power
curve wondering how they may survive.
EMPLOYMENT TRENDS
The global workforce is expected to experience significant churn
between job families and functions. Across the countries covered by the Report,
current trends could lead to a net employment impact of more than 5.1 million
jobs lost to disruptive labour market changes over the period 2015–2020, with a
total loss of 7.1 million jobs—two thirds of which are concentrated in routine
white collar office functions, such as Office and Administrative roles—and a
total gain of 2 million jobs, in Computer and Mathematical and Architecture and
Engineering related fields. Manufacturing and Production roles are also
expected to see a further bottoming out but are also anticipated to have
relatively good potential for upskilling, redeployment and productivity
enhancement through technology rather than pure substitution.[11]
Grocery Stores and Sense of Community
Grocery stores are a part of who we are as Americans; they
are form of community center. They define our health, local employment and
local economic health. Grocery stores
also have kiosks where locals meet and chat about their lives with one another,
while other family members shop. Grocery stores can give people a way to
connect. One such store is Wegmans in Fredericksburg, Virginia. Wegmans holds
movies nights for kids. Wegmans also offers venues for community within their
family/community friendly dining areas. Stores like Wegman's provide jobs;
promote family and community; shape perceptions of a sense of well-being,
quality and abundance; it gives you a sense of wealth, perspective and
appreciations we live in a free and prosperous country...even during hard times
like now. I know more people by name that work at Wegman's than any other.
On the other hand, we have stores like Lidl surfacing in the
US which is antitehical to nearly everything in the previous paragraph.
What kind of future do we want? Kids living at home longer
because they cannot even work at a local grocery store. People with
disabilities, or the elderly, who need jobs to make ends meet as well as give
them a sense of independence. Even people, who lack the means to pay for higher
education are left out of the future; then again, a higher education does not
guarantee a job. Worse yet, high unemployment contributes to increases in drug
use and crime.
What Now?
The article reveals a
kaleidoscope of issues I identify as observations and questions I think people
may want to consider. There is the consumer view; there is the business view;
there is the impact on society and social responsibility view; and there is
potentially an extremist view. I’m pro-business by nature, but I also believe
social responsibility needs to be considered…especially in a world of haves and
have-nots chasm that is widened by technology and systems under the label of
globalization.
Consumer View
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Pro-Business View
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Social Impacts View
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Extremist View
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Low-cost products
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Less employee equals
potential for higher profit margins for a select few. Product sales is
premium; customer service and satisfaction made subordinate.
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Perception that wealth gets
concentrated to a few, which can lead to radicalization between haves and
have-nots
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Perceptions of Loss of
equal opportunity could sow seeds of radical political activism e.g. Occupy
Wall Street
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Limited core products
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Systematic acquisition and
dispersing logistics systems
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Lack of personal
connection. Lidl stores have little character, personal interaction and
nuance; you simply run view a conveyor belt – very socialist
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American Dream is gone,
freedom of choice fades
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Bring your own bags and bag
your own groceries
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Lowers overhead costs
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Difficult for disabled shoppers
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More empty buildings and
dying towns like Detroit, Michigan
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Offers low-cost merchandise
such as clothing and other items
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Materials are
systematically made; cheap; lack character
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Regimentation of product
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Great prices, as long as
you have a paying job
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Traditional stores unable
to compete with low prices
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Lower paid employees;
possible less in benefits; longer work hours
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You are a replaceable wheel
in the big machine.
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Provides a simple function;
like going to the bathroom.
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Potential to depress local
economy as people cannot find jobs
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Possible increased crime
and drug use due to lack of opportunity
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Some potential
perspectives amongst Consumers, Pro-Business, Social Impacts and Extremist
Views
Unstable economies contribute to a variety of culture
changes, social problems, social adjustments/adaptations and challenges…the
worse culmination of them lead to revolutions and/or insurgencies. My nearly three-decades worth of experience
and insights on a variety of international issues naturally attune me to watch
for the potential of resource-driven conflicts e.g. access to water, food and
ability to live life on one’s own terms. America is not immune to the impacts
of lost jobs, wealth and prosperity our country once enjoyed over the last
century. Some people even wonder if America is on the decline. Look at the
American farmer…they are nearly extinct.
[12] Here’s
what the World Economic Forum had to say about the future of jobs.
"Without
urgent and targeted action today to manage the near-term transition and build a
workforce with futureproof skills, governments will have to cope with
ever-growing unemployment and inequality, and businesses with a shrinking
consumer base," said Klaus Schwab, founder and executive chairman of the
World Economic Forum, in the report.[13]
These are the sorts of random,
but loosely connected thoughts running through my mind simply because of a
grocery store. Had Lidl opened their store in Fredericksburg, it would have
killed my suspicion and this article would never have happened.
This is not a research paper;
just a random piece driven by curiosity.
References
[1] Estes,
Lindley. "Lidl Buys Another Spotsylvania Store Site: Local Business."
Fredericksburg.com. Last modified October 15, 2015.
http://www.fredericksburg.com/business/local_business/lidl-buys-another-spotsylvania-store-site/article_75cd77f4-015f-5e87-bffe-a7c7d59cd51b.html.
[2] Wikipedia.
"Walmart." Wikipedia, the Free Encyclopedia. Last modified September
10, 2016. https://en.wikipedia.org/wiki/Walmart.
[3] Wikipedia.
"Lidl." Wikipedia, the Free Encyclopedia. Last modified September 10,
2016. https://en.wikipedia.org/wiki/Lidl.
[4] Petersen,
Hayley. "German Store Lidl Plans US Expansion." Business Insider.
Last modified November 3, 2015.
http://www.businessinsider.com/german-store-lidl-plans-us-expansion-2015-11.
[7] Aquatic
Nuisance Species Task Force. "Northern Snakehead." ANS Task Force.
Accessed September 10, 2016. http://www.anstaskforce.gov/spoc/snakehead.php.
[8] Petersen, Hayley. "German Store Lidl
Plans US Expansion." Business Insider. Last modified November 3, 2015.
http://www.businessinsider.com/german-store-lidl-plans-us-expansion-2015-11.
[9] Brinded,
Lianna. "WEF Davos Report on Robots Replacing Human Jobs." Business
Insider. Last modified January 18, 2016.
http://www.businessinsider.com/wef-davos-report-on-robots-replacing-human-jobs-2016-1?r=UK&IR=T.
[10] World
Economic Forum. "Executive Summary- The Future of Jobs Employment, Skills
and Workforce Strategy for the Fourth Industrial Revolution." World
Economic Forum - Home. Last modified January 2016.
http://www3.weforum.org/docs/WEF_FOJ_Executive_Summary_Jobs.pdf.
[11] World
Economic Forum. "Executive Summary- The Future of Jobs Employment, Skills
and Workforce Strategy for the Fourth Industrial Revolution." World
Economic Forum - Home. Last modified January 2016.
http://www3.weforum.org/docs/WEF_FOJ_Executive_Summary_Jobs.pdf.
[12]
Ferdman, Roberto A.
The Decline of the Small American Family Farm in One Chart."
Washington Post. September 16, 2014. Accessed September 07, 2016.
https://www.washingtonpost.com/news/wonk/wp/2014/09/16/the-decline-of-the-small-american-family-farm-in-one-chart/.
[13] Brinded,
Lianna. "WEF Davos Report on Robots Replacing Human Jobs." Business
Insider. Last modified January 18, 2016.
http://www.businessinsider.com/wef-davos-report-on-robots-replacing-human-jobs-2016-1?r=UK&IR=T
