Dive Brief:

• Lidl CEO Jesper Hojer has resigned after nearly two years leading the discount retailer, according to reports. Hojer, who according to the company has stepped down for personal reasons, joined Lidl’s board in 2015 and was named to the chief executive position in 2017 to replace Sven Seidel.
• The company has named purchasing director Ignazio Paterno as interim chief executive. Paterno has worked in various roles for parent company Schwarz Group since 2004 and served as the CEO of Lidl Italy from 2015 to late 2018.
• Hojer’s departure comes on the heels of Kaufland CEO Patrick Kaudewitz’s resignation in mid-March. Kaufland, which like Lidl is operated by the Schwarz Group, operates 1,300 discount stores, mostly in Germany. Schwarz Group CEO Klaus Gehrig has assumed the chief executive role while the company chooses a replacement.

Dive Insight:

Two chains that control more than 11,000 stores and upward of $40 billion in annual sales are currently without long-term leadership, leaving question marks for the discount grocery empire and Lidl's operations in the U.S.

The executive turnover rate at Lidl has been notably high of late. Hojer’s departure marks the second chief executive resignation for Lidl in as many years. Sven Seidel left the top spot in 2017 after less than three years, reportedly due to disagreements with ownership over the chain’s future plans. In the U.S., the company replaced Kenneth McGrath in the top position in 2015, then swapped out Brendan Proctor for company veteran Johannes Fieber last summer after stumbling off the block.

Kaufland, meanwhile, saw its chief executive depart as the chain is in expansion mode. It will soon open its first stores in Australia and is expanding in Germany, reportedly with an eye toward acquiring Metro’s Real chain of hypermarkets.  

The impact on Lidl’s U.S. operations is unclear at this point. The chain has adjusted its approach after a disappointing entrance nearly two years ago, focusing on a wider range of store sizes, real estate sites and promotions. Lidl U.S. recently appointed a new chairman, Roman Heini, who spent 18 years with rival Aldi, and in November acquired the Best Market chain, which operates on New York's Long Island and in New Jersey.

Last year, Schwarz Group CEO Klaus Gehrig derisively referred to Lidl’s U.S. stores as "glass palaces," and reports have painted the expansion as falling well short of expectations. But research shows there's still high demand for the discounter approach in the U.S. Up to 30% of U.S. consumers who shop at mass and traditional grocers also shop at Aldi or Lidl, according to a report from Bain & Company.