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Wednesday, December 8, 2021

Lidl to ramp up UK store openings with 1,100 stores by 2025


German discounter Lidl has announced plans to increase the number of its UK stores to 1,100 by 2025, up from 880 now.

The move will create 4,000 new jobs, the supermarket chain said.

Its latest UK accounts, released on Wednesday morning, showed that revenue increased by 12% to £7.7 billion in the year to the end of February.

This contributed to a pre-tax profit of £9.8 million, compared to a pre-tax loss of £25 million the previous year.

Despite the challenges posed by the pandemic, it said it opened 55 new UK stores in the year, putting it on track to meet its previously stated goal of 1,000 stores by the end of 2023.

It stated that the improved results “can be attributed to the company’s ambitious expansion plans and prudent investments in the United Kingdom.”

“We delivered an impressive trading performance during the period, which was aided by our ongoing investment in new and existing stores, product innovation, and our people,” said CEO Christian Härtnagel.

He said the company remained confident in its strategy and its stores-first approach.

Lidl currently has over 880 stores, over 26,000 employees, and 13 distribution centres in England, Scotland, and Wales, accounting for 6.2 percent of the UK grocery market.

It is still lagging behind larger competitors. Tesco, the market leader, has a 27.6 percent market share with approximately 3,400 branches, the majority of which are convenience stores.

According to the most recent Kantar data, published at the end of October, Sainsbury’s is the second-largest retailer, with a 15.2 percent market share. It has approximately 1,400 stores.

Asda has about 600 stores but a 14.3 percent market share, while Morrisons has about 500 branches but a 10% market share.

With 7.9 percent market share and 930 stores, Aldi is currently the fifth-largest supermarket in terms of market share. It announced plans to open 100 new stores over the next two years earlier in November.

It is followed by the Co-op, which is the sixth-largest retailer with a 6.3 percent market share and approximately 2,600 stores.

Brexit impact

Lidl UK warned in its results that the changes it was forced to make due to Brexit could “put pressure on the company’s resources and capacity, resulting in severe disruption to the supply chain.”

It outlined the key consequences, which included increased administration in importing and exporting into and out of the UK.

Additional certification and licencing, as well as additional border checks by health authorities, were also mentioned.

It claimed that customs agents’ capability and capacity had been “stretched to the limit,” limiting their ability to process goods more efficiently.

It also revealed that some shipping lines had missed government deadlines, causing delays at the UK border due to “mistakes made during manifestation of incoming goods.”

It also stated that there were additional costs due to customs duties and import costs.

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