Wed. Dec 1st, 2021

Lidl will create 4,000 new jobs in the UK over the next four years and add 100 stores, continuing its brick-and-mortar expansion as competitors target deliveries.

The low-cost supermarket, which does not offer delivery services, has previously stated that it will expand from 880 to 1,000 stores by the end of 2023. It increased it to 1,100 by the end of 2025 on Wednesday, effectively continuing the pattern of addition. 50 stores per year for a further two years.

It added that it would look for sites in town centers, retail parks and metropolitan locations, but Christian Härtnagel, Lidl chief, said there would be no specific geographical focus, adding: “We need more shops up and down in the country.”

He has revealed that the expansion program will be funded by significant additional equity investment from Lidl GB’s German mother – a total of £ 267 million during its financial year to February 2021 and a further £ 128 million in June.

Lidl has long maintained that e-commerce is not compatible with its limited range, low-cost business model.

Instead, it focused on persuading customers to spend more on each store visit; the Lidl Plus loyalty program launched during the financial year offers lower prices to holders plus an additional discount if they spend more than £ 200 a month.

Härtnagel said the company was well prepared for Christmas and had overcome the supply challenges of the summer. “In an ordinary shop on an ordinary day, there are no obvious gaps. . . there are no more systemic problems.

“But it is still not nearly normal. Everywhere there are labor shortages. . . everything is much harder work than in a normal year. ”

In response, Lidl is raising pay rates on its operations; staff in the store will receive £ 10.10 per hour outside London from April next year, making it the second supermarket to break the £ 10 per hour level.

Härtnagel said the company was ready for another round of Brexit bureaucracy in January, when customs declarations on products arriving from the EU in the UK would be required, and that the experience of the broader Schwarz Retail Group – Lidl’s owner – was valuable.

“They have stores in Serbia, in Switzerland. . . they are very used to dealing with these issues, ”he said, referring to countries outside the EU but doing much of their trade with the bloc.

For the year to end-February 2021, a period that included the peak impact of the pandemic, Lidl GB reported sales of £ 7.7 billion, an increase of 12 percent over the previous year. It was slightly higher than the 10 percent emerging competitor Aldi managed for the year to December 2020.

Both discount retailers slowed down sales growth in the early stages of the pandemic, as shoppers switched to online ordering and preferred to do some big shopping in larger supermarkets where social distance was easier.

Even as vaccine deployment progressed and buyers gained more confidence, they struggled to regain previous rates of market share growth; in the 12 weeks to October 31, Lidl sales were flat and Aldi fell 0.4 percent, according to Kantar data, although it was still a better performer than all the established supermarkets except Tesco.

Lidl’s profit before tax was £ 9.8 million after repaying £ 100 million in business tax relief, compared to a loss of £ 25 million in the previous year.

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