Lidl is understood to be scaling backs its US ambitions amid a tough fight for footfall.

Six months after entering the US with plans to build 100 bigger, bolder stores over the next year, the discounter has done a U-turn and now wants to build smaller, urban branches that are more in line with its UK model.

The size of its stores will be slashed from 36,000 sq ft to 15,000 sq ft and Lidl will consider rental properties in central urban locations rather than building all of its own stores, according to reports.

“We are actively looking at a number of sites that are smaller,” Lidl US spokesman William Harwood told The New York Post this week. “It gives us more flexibility to accelerate our growth.”

Lidl is also rumoured to have postponed store openings in New Jersey, Pennsylvania, Ohio and Virginia, but Harwood declined to comment.

According to retail marketing company InMarket, which tracks customer loyalty, customers were initally drawn to new Lidl stores over the summer but it struggled to maintain its lead over the likes of Walmart and Aldi.

Michael Rogosa, research director at analysts Planet Retail, said Lidl’s U-turn was a “necessary strategy adjustment”.

“Competitors responding to US drivers of change boast a strong offer in terms of value and ecommerce differentiation, meaning Lidl faces a fight for shopper traffic,” he said. “Targeting busy urban locations is appropriate as Lidl is not seen as a destination store by shoppers and must rely on high passing traffic levels.”

Lidl US was not available for comment.