Editor's blog: Behind Kroger’s lawsuit against Lidl

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Editor's blog: Behind Kroger’s lawsuit against Lidl

By Lawrence Aylward - 07/12/2017

Call it what you want — an indictment or a shot across the bow — but The Kroger Co.’s lawsuit against Lidl makes for great theater in the ever-competitive grocery industry, specifically private brands. The lawsuit was reported throughout the mainstream media, including USA Today.

Germany-based Lidl, which opened its first 10 deep-discount stores in the United States in June with more openings slated for this month, has received much fanfare in the national and trade media. So it’s not like Lidl is being welcomed with open arms by other U.S. grocery retailers. Lidl has vowed to disrupt the U.S. grocery industry with its low prices. The chain has landed in America to gain market share from other retailers and evolve into one of the nation’s top grocers. Lidl already operates 10,000 stores across Europe.

Lidl offers an assortment that is 90 percent private brands. But Kroger has a problem with one of those private brands, “Preferred Selection,” which Kroger feels is too close to the name of its its “Private Selection” store brand, which Kroger created 20 years ago. So Kroger, based in Cincinnati, filed a lawsuit June 30 against Lidl for trademark infringement.

“As a direct result of Lidl’s wrongful conduct, Kroger has suffered and will continue to suffer irreparable injury," Kroger stated in the lawsuit, which was filed in U.S. District Court in the Eastern District of Virginia. Lidl, with U.S. operations based in Arlington, Va., says Preferred Selection is original and legit.

Kroger’s Private Selection consists of artisan foods and gourmet groceries. Lidl’s Preferred Selection brand includes sustainability-certified fresh and frozen seafood, fresh-cut flowers, European-style cured meats, imported chocolate, fresh bread and other products.

The timing of the lawsuit is interesting, as Kroger waited about three weeks after Lidl opened its stores before filing it. Some wonder if Kroger was waiting for just the right strategic moment to file the lawsuit.

According to a report in the Richmond Times-Dispatch, Kroger learned of Lidl’s Preferred Selection logo after Lidl filed paperwork last September with the U.S. Patent and Trademark Office in advance of registering for a trademark. The lawsuit states that Kroger made Lidl aware of its concerns and filed a notice opposing the logo in March with the U.S. Patent and Trademark Office.

Kroger asked the federal court to issue an injunction ordering Lidl to immediately stop using the “Preferred Selection” logo and to pay attorney and court fees, according to the Richmond-Times Dispatch. Lidl has asked that it “be allowed sufficient, reasonable time to respond to Kroger’s request for a preliminary injunction, which would impact millions of dollars of product and irreparably injure Lidl.”

A hearing on the motion for the preliminary junction is set for July 25.

Lidl is opening more stores on the East Coast this summer and plans to have up to 100 stores up and running by mid-2018. Adding to the theater aspect, Lidl is also reportedly looking at land in the Greater Cincinnati area — Kroger’s backyard — to open stores.