Dive Brief:

• Aldi and Lidl opened dueling locations Tuesday morning in Lacey, New Jersey about a mile apart, according to local news reports. The Lidl store opened at 7:40am off Route 9 while the Aldi just down the road opened at 7:45am.
• Lidl moved its ribbon cutting back two days after learning of Aldi’s September 10 opening date. It also doubled the number of gift cards it gave away from 100 to 200 and boosted the top value from $100 to $250. Aldi countered by soft opening Monday.
• Aldi operates 51 stores in New Jersey and more than 1,900 across the U.S. Lidl's store is its fifth New Jersey store and 70th in the U.S.

Dive Insight:

For years, the two discounters have been one-upping each other across Europe. Now, that battle is heating up in the U.S. as both chains accelerate their growth.

Aldi currently holds a commanding lead here, with close to 2,000 stores stretching from coast to coast and more than 500 more in the pipeline over the next few years.

However, as the scene in New Jersey shows, Lidl is determined not to be upstaged by its German rival. The company has stepped up its expansion, according to a recent analysis by research firm IGD, which notes that Lidl has opened 16 stores and closed two since bringing in new CEO Johannes Fieber last May. By next spring, Lidl aims to have around 100 stores in place, including its first four converted Best Market stores on Long Island.

"While the pace of development has been slower than anticipated, it appears that following a period of refinement, the retailer is set to run with a more aggressive pace of new space growth," IGD wrote. "Four new stores are opening this month."

IGD also noted a few updates Lidl has made to its stores, including a "Rethink Grocery" strapline on the exterior and "market-style" flourishes like blackboard signage in the meat section and wooden crates in the produce department.

Aldi's stores are also evolving. Last year, it boosted its fresh assortment in stores by 40%, adding new products like marinated cilantro lime chicken breasts, bottled kombucha, veggie noodles and single-serve guacamole.

More recently, Aldi has begun adding an "Aldi Savers" promotional tag in its circulars and online, as consulting firm Brick Meets Click noted, further boosting the discounter's low-price image.

Despite the brinkmanship in New Jersey and elsewhere, Aldi and Lidl have their sites squarely set on legacy retailers. ShopRite, which is New Jersey's leading grocer and has a location just a stone's throw from the new Aldi in Lacey, will have its hands full. Walmart will also have to continue playing defense on pricing. According to a study commissioned by Lidl, the discounter's entry into new markets prompts competing retailers to slash prices in core categories up to 55%.