As it celebrates 30 years since opening its first stores in Britain, Lidl GB has posted strong annual results and stated that it plans to accelerate its expansion plans.
Latest accounts show Lidl made a pre-tax profit of £43.6m in the year to 28th February 2024, versus a loss of £75.9m in the previous 12 months. Meanwhile, EBITDA surged from £28.5m to £220.8m on revenue up 16.9% to £10.9bn.
The discounter highlighted that it experienced the highest growth in customer visits of any supermarket last year, with shoppers switching half a billion of spending to its stores.
Lidl noted that it benefited from investments made in its infrastructure and upgrading stores, which contributed to improved product freshness and an enhanced store experience for its customers. Expanded ranges and competitive prices also attracted shoppers from its rivals, with a further boost from its Lidl Plus loyalty scheme that saw a 24% increase in users.
The discounter is now accelerating its expansion plans with 18 new stores set to open in the next few months – including nine in the next four weeks – followed by around 40 more during the next financial year and “hundreds more after that”. Lidl’s newest store opened last week in Bristol, nearly 30 years to the day that the German retailer opened its first 10 stores in Britain. It now has more than 960 outlooks and is the nation’s sixth-biggest grocer.
The group also highlighted recent Kantar data showing it had secured 326,000 additional shoppers in the year to 3rd November – more than any other supermarket – with particularly strong growth across the fresh produce category (+22%).
Last week, Lidl revealed that it was on track to invest a total of £21bn in the British food industry by the end of FY24, exceeding its original five-year commitment of £15bn by 40%.
In a statement today, Ryan McDonnell, Lidl GB CEO, commented: “We’ve come a long way since we opened our first stores here 30 years ago, from stocking jars of frankfurters to now having over two-thirds of our products sourced from British suppliers. While our product range has continued to evolve, we’ve stayed true to our customer promise of offering the best value on the market. In doing so, we have become trusted by households across the country to be their one-stop shop, while always supporting British food production.”
He noted that 60% of households in Britain now shop at Lidl, with it seeing increasing loyalty amongst shoppers. “We have great momentum and, although our ambitions have no ceiling, we won’t rest on our laurels,” said McDonnell.
On Tuesday, Lidl joined dozens of retail giants in signing a letter to the Treasury warning job losses were “inevitable” and price rises “a certainty” as a result of measures announced in the Budget and other rising costs.
Speaking to the BBC today, McDonnell declined to put an exact figure on the extra cost of NICs, but said it was just one of a number of new costs coming down the track, creating a cumulative burden for the industry.
“We’re talking about National Insurance, National Living Wage, we’re talking about business rates. We have packaging and recycling taxes coming in. That’s a lot of pressure on business all at once,” he said. “I think the government needs to review how they intend to inspire growth.”
NAM Implications:
- A standout has to be the fact that Lidl’s expansion plans appear to indicate that UK has yet to reach discounter saturation point.
- This coupled with the inevitable share gains that will arise from the Budget increases.
- Sourcing 66% from UK producers has to strike a chord with consumers in time…
