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Lidl Upweights UK Expansion

Lidl has announced plans to accelerate its UK expansion, with the opening of 50-60 new stores annually for the next 5-10 years. The plans include investment in logistics to support the additional stores, as well as a new head office.

Almost GBP 1.5bn (EUR 1.8bn) will be invested over the next two years, according to Christian Härtnagel – who took over as UK CEO nine months ago. The plan will see the number of store openings double – Lidl opened a total of 55 stores in 2015 and 2016 combined. The retailer will continue to invest in its ‘Lidl 2.0’ store refurbishment programme, which brings fresh food to the front of the store in order to attract shoppers.

Lidl has 670 stores in the UK, served by 10 distribution centres. 


Opinion

Is it Really New News?

Lidl plans to open a new store every week – this is big news; and a significant increase in store openings vs. the last two years, where the retailer seems to have been preoccupied with store refurbishments and the rollout of its 2.0 store concept, resulting in just 30 new stores last year. However, it is arguably not really new news. Christian Härtnagel’s predecessor, Ronny Gottschlich, had vocal ambitions for 1,500 UK stores – which at the proposed rate of 55 stores a year would take the retailer until 2030 to reach – so you could interpret this latest announcement as the opposite of an upweighted expansion plan.

So, what’s different? Well, the proposed investment of GBP 1.5bn (EUR 1.8bn) is the same amount as was previously spoken of in 2015, but will be spent over two years rather than three. There is also more detail on planned enhancements in logistics and a huge recruitment drive to support the expansion. Lidl says it will open a new DC every year and has already employed an additional 2,500 people in the last year. Its new GBP 70m (EUR 85m) head office will open in 2020. The plan is therefore about way more than just store numbers.

Store numbers count though. Half of the UK population have shopped at a Lidl in the last 12 months according to the retailer and it is convinced that it can only increase this statistic by opening more stores, as many UK shoppers won’t be in easy reach of one of its 670 outlets. We are sure it's no coincidence that the planned growth trajectory will get Lidl to 1,000 stores in 2022, the same target as another German discount chain you may be familiar with – although Aldi has just moved the goalposts, with its UK & Ireland Chief Executive recently telling The Grocer magazine that it will be closer to 1,300 by that date.  

Topics: Schwarz Group