Dive Brief:

• Kroger has withdrawn its private label lawsuit against Lidl, according to Coupons in the News. Court documents show the two sides agreed to dismiss the suit with prejudice. As a result, Kroger cannot revisit the case or file a similar lawsuit in the future.
• Kroger, which filed its lawsuit back in June, claimed Lidl’s Preferred Selection private label line was too similar in name and appearance to its Private Selection line, constituting trademark infringement.
• Kroger’s claim seemed to diminish after a judge denied the retailer’s request for a preliminary injunction, which would have forced Lidl to stop selling Preferred Selection products. The judge noted the names of the two lines weren’t similar in either meaning or appearance, and set a court date for January.

Dive Insight:

Kroger claimed in its lawsuit that Lidl’s Preferred Selection had sowed confusion in the eyes of consumers and would result in lost sales for the Cincinnati-based company. But industry experts, including many interviewed by Food Dive in recent weeks, felt the suit was more about industry gamesmanship than trademark infringement.

Both sides trotted out expert witnesses during the initial hearing in July. Kroger claimed Lidl had modeled its Preferred Selection line off Kroger’s Private Selection, a more than twenty-year-old brand that encompasses gourmet coffee, baked goods and other selections. Lidl CEO Brendan Proctor countered that the discounter designed each of its Preferred Selection products to stand out individually. Many items in the line, which comprises 160 out of 3,000 products typically found in a store, sport flags on the logo indicating their country of origin, he noted — a detail that makes them distinct from Kroger’s Private Selection line.

As for Kroger’s claim about customer confusion, Lidl argued that “consumers are well aware of the grocery store they are shopping in when they pull into the parking lot.”

Kroger’s suit reflected the importance of private label, which has become a more than $20 billion business for the country’s largest grocery chain. It also may underscore Kroger’s anxieties over industry competition. Discounters Aldi and Lidl, along with Walmart, Amazon and even Target, have slashed prices in recent months. Kroger has responded by instituting its own price cuts to keep up, fostering fears that it could eat into Kroger's profits. As a newcomer to the industry, Lidl may have appeared a vulnerable target for Kroger.

However, Kroger currently has bigger things to worry about, including falling profits and a stock price that’s around the lowest it’s ever been. The retailer posted mixed results in its most recent earnings report, and is focused on digital and store innovations to lift its fortunes over the long hall amid intense pricing pressure.

Looking at the bigger picture, there’s been some speculation that increasing competition and the growth of private label could pave the way for more lawsuits similar to Kroger’s. There are certainly a lot of similar-sounding lines out there, including Aldi’s Kirkwood brand and Costco’s Kirkland Signature line, as well as Kroger’s Simple Truth, Aldi’s SimplyNature and Ahold Delhaize’s Nature’s Promise. However, Kroger’s failure to advance its case could send the message about the difficulty of such gambits, and indicate that grocers resources are best spent elsewhere.