Despite losses that totaled nearly £76 million in the 52 weeks ending in February, Lidl GB is promising to invest in more stores, more colleagues and more low prices to aid cash-strapped consumers.
Despite that punch-in-gut bottom line figure, Lidl officials remain steadfastly positive thanks to a 1% growth in market share and revenue that jumped 18%. And while Aldi reached its benchmark of opening its 1,000th store recently, Lidl has been the leader in opening new supermarkets during the stretch.
Undaunted by higher operating costs and inflation nipping at consumer spending, Lidl believes its business model has better long-term potential than traditional chains.
“The entire retail market has seen inflation, and we are no exception,” says Ryan McDonnell, Lidl GB’s chief executive officer. “However, for us, what is important is that our price gap to the traditional supermarkets is as strong as it has ever been. We’ve invested in keeping our prices low for customers in what has been a very challenging year for most. With many more customers flooding through our doors each day, our ambition is to ensure that every single household has access to high quality, affordable food at their local Lidl store.”
There is no doubt Lidl and rival Aldi have gotten the attention of shoppers, continually undercutting competitors on average shop by several pounds, and in some cases, double digits. They’ve even managed to score victories in one of the toughest departments when it comes to reductions – fresh produce.
In fact, Lidl says it saw an additional 1.4 million shoppers come through its doors over the past year. It has invested heavily in British suppliers, with more than £4 billion spent on British companies during those 52 weeks. It believes low pricing eventually will have a bigger payoff.
“We’ve always had a clear commitment to offer the best value to our customers and that is a promise we will always keep, even in uncertain economic times,” McDonnell says. “Alongside preserving this price promise, rewarding our people and maintaining long-term relationships with our suppliers will always be a priority. As a privately-owned business we have the ability to make decisions that we know will have immediate benefits for our people, customers and suppliers and long-term benefits for our business.”
Lidl also increased pay for colleagues with a massive £50m poured into higher hourly rates. It recently opened its £300m distribution centre in Luton with 1,500 new jobs and plans to open 50 more stores in the UK in the coming year, which will mean more work and more savings for consumers.
“We’re entering an exciting new phase of growth where we are bolstering our infrastructure to sustain us for the long term and hiring thousands of new colleagues,” McDonnell says. “Next year will mark 30 years of Lidl in Great Britain, and there is no ceiling on our ambitions for the next 30 as we see the potential for hundreds of new stores across Great Britain. In many ways our brand has never been more relevant. We are, and will continue to be, a discount retailer maintaining a relentless focus on providing our customers with great quality at unbeatable prices.”