In a surprise move that will set Lidl U.S. on a new growth trajectory, the hard discounter said it has agreed to acquire 27 Best Market supermarkets operating in New York and New Jersey and would convert them to the Lidl format beginning next year.
The deal will give Lidl a strong presence on Long Island, N.Y., and provide it with sites in the New York City boroughs of Manhattan and Queens, markets that in many cases are considerably denser and wealthier than the Southeast focus of the chain's initial fleet. It also represents Lidl’s first acquisition. Until now the high-profile discounter, which entered the U.S. in 2017, had focused on building its own sites, although WGB reported recently that its real estate plans have been in flux as a new U.S. leadership has taken over.
“Best Market has played an enormously positive role in the area, and we look forward to working closely with Best Market employees to build on that success,” Johannes Fieber, CEO of Lidl U.S., said in a statement. “We are excited to expand into many great communities on Long Island and across the New York City area and introduce more customers to our simple and efficient approach to grocery shopping, which will mean high quality and huge savings for more shoppers.”
A purchase price was not disclosed. The deal includes all but one of Best Markets’ 28 stores; its site in Newington, Conn., was not part of the deal. The Bethpage, N.Y.-based business has been owned by the Raitses family since 2004. Rebecca Philbert, a former Safeway and A&P executive, has served as its CEO since 2011, overseeing multiple store renovations and a name change from its previous identity as Best Yet Market. Its stores are known for neighborhood locations, an emphasis on fresh foods and, in some locations, a kitschy, “retro” marketing approach that makes a virtue of the relatively small, second-generation retail sites they occupied. The chain acquired several former Waldbaums stores as part of A&P's 2015 bankruptcy auction.
“Today is a great day for Long Island, our Best Market team, and our valued customers in New Jersey and New York,” said Aviv Raitses, co-owner of Best Market. “Partnering with Lidl on this deal offers our employees a secure future with a growing grocer and continues the great tradition we started more than 20 years ago. We are delighted to be part of such a win-win, and Best Market customers have something great to look forward to with Lidl.”
Lidl said it was planning a step-by-step transition process that will begin next year and will involve the remodeling, reinvestment and reflagging of Best Market stores to converted Lidl stores. It said all Best Market employees in New Jersey and New York would have the opportunity to join Lidl, where the company said it would offer “wages and benefits that are equal to or better than what they earn with Best Market.”
PJ Solomon is advising Best Market on the transaction. Wilson Sonsini provided Best Market with legal advice.
“The New York market is one of the most important strategic markets in the United States,” Scott Moses, managing director and head of PJ Solomon’s food retail and restaurants investment banking practice, told WGB in an interview. “This is a wonderful transaction for the Raitses family, the Best Market teammates and their communities.”