Shortly after opening its first stores in the U.S., German grocery giant Lidl has become subject to a lawsuit filed by Kroger supermarkets, accusing Lidl of copying their brand of products and demanding financial compensation.

 

In an amended complaint filed in late June in a Virginia court, Kroger, the owner of more than 2,796 supermarkets in the U.S. including Harris Teeter, stated that Lidl had violated Kroger’s home-made brand. The German discount chain offers in its American stores located in Virginia, South Carolina and North Carolina products with the “Preferred Selection” label, whose prices are ultra competitive. For Kroger, this label was too similar to its own brand “Private Selection,” which created, according to Kroger, confusion with consumers and the general public.

 

Consequently, Kroger petitioned the court to prohibit Lidl from continuing its use of the “Preferred Selection” trademark and to remove all labels referring to it in physical stores as well as on the Internet and social networks. In addition, Kroger claimed damages of an unspecified amount. “Lidl has competed unfairly and continues to compete unfairly with Kroger,” the lawsuit stated. “As a direct result of Lidl’s wrongful conduct, Kroger has suffered and will continue to suffer irreparable injury, including, but not limited to, injury to its trademarks and to the goodwill and business reputation associated with those trademarks,” the U.S. group wrote in their complaint.

 

However, a few weeks ago, the court dismissed the case with prejudice, meaning the court made a final determination on the merits of the case. As a result, the court forbade Kroger from filing another lawsuit based on the same grounds.

At a time when the major American distribution groups are affected by the competition of online commerce, Lidl’s arrival raises fears among competitors such as Kroger, Wal-Mart and Target of growing competition in the sector, especially since the German group intends to offer low prices.

Lidl plans to establish 20 stores this summer and then 100 in the next year. After Virginia and the Carolinas, the group hopes to tackle the East Coast and continue expanding in the South and Central-East in states such as Georgia and Kentucky.

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Reinhard von Hennigs
www.bridgehouse.law