Discounter Lidl to step up UK store openings
New store openings slowed to 15 in 2023/24 year
Plans 23 in 2024/25, 40 in 2025/26
Returned to pretax profit in 2023/24
UK budget to add 'ten of millions' of pounds to costs
Recasts with store openings and CEO comments paragraphs 1 to 6
By James Davey
LONDON, Nov 20 (Reuters) -The British arm of German discount supermarket chain Lidl will accelerate its new store openings in the next few years after they slowed to just 15 in its 2023/24 financial year, it said on Wednesday.
Having opened 50 stores in 2022/23, Lidl GB focused its investment in the year ended Feb. 28, 2024, more on improving its distribution and warehouse infrastructure and existing stores. It ended the period with 964 stores.
However, CEO Ryan McDonnell said openings would rise to 23 in 2024/25, to around 40 in 2025/26, "and hundreds more after that".
He said he was unsure what the ceiling for Lidl GB would be.
"I don’t know whether that’s 1,500, 1,600, 1,700, I can’t say, but the ambition is really going to be about the market demand and our brand development," he told Reuters in an interview after the grocer reported annual results.
Rival discounter Aldi has a target of 1,500 stores.
Lidl GB, which is owned by Germany's Schwarz Group, and Aldi have expanded rapidly over the past two decades, transforming the UK supermarket scene and forcing traditional players, including market leader Tesco TSCO.L and No. 2 Sainsbury's SBRY.L, to compete more aggressively on price.
Aldi is Britain's fourth largest grocer with a market share of 10.4%, while Lidl is No. 6 with 7.7%.
Lidl is currently Britain's fastest growing bricks and mortar grocer, according to market researcher Kantar.
It made a pretax profit of 43.6 million pounds ($55.4 million) in 2023/24 versus a loss of 76 million pounds the year before. Revenue rose 16.9% to 10.9 billion pounds, driven by strength in fresh fruit and vegetables, and bakery products.
"Profit was driven by volume growth from new and existing customers, and focused cost control to drive efficiencies and margin," Lidl GB said.
McDonnell said the business had "great momentum" going into Christmas but cautioned last month's UK government budget, which raised employment taxes and hiked the minimum wage, would add "tens of millions" of pounds to costs next year.
($1 = 0.7868 pounds)
Reporting by James Davey. Editing by Sarah Young and Mark Potter
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
