Schwarz Group’s Lidl

Schwarz Group’s Lidl has been benefiting from the credit crunch, but it believes the reason its new customers are coming back is also because of the investment it has made in the business, with broader ranges including brands, more British products, more shelves instead of pure pallet presentation and more appealing stores.

It says its customer count is in like-for-like double digits as the ABC1 demographic is a growth area and the average spend is growing as well, due to the disappearing stigma among shoppers of shopping with discount stores - a development Lidl wants to accelerate further by the introduction of a premium private label and the extension of its range.

In the wake of the financial crisis and consumers searching for cheaper ways to shop, Lidl is stepping up expansion in the UK. In the long run, Lidl sees potential for 1,400 Lidl stores in the UK. Part of that expansion is expected to come through opportunistic buys from ailing competitors. Lidl will also be stepping into previously unavailable towns and high streets using a smaller store format. During 2008, the discounter opened ten smaller stores with a footprint of 200 to 500 square metres, part of a long-term strategy to put the brand in front of a wider audience, with another ten in 2009.

Lidl has opened its 500th store in the UKand is going to reach a network of 750 outlets within five years’ time. Long term plans see it expanding at a rate of 8-12% a year for up to 15 years. This equates to more than 50 stores a year and matches rival Aldi’s target of opening one store a week. To deliver these requirements, it will look to develop stores on sites owned by residential developers that have shelved construction because of the housing slump.

Lidl started trialling a convenience-oriented discount store under a new banner name, Lidl Express (although the word Express was subsequently taken down). The outlet in Edmonton, roughly half the size of a new purpose-built Lidl store, had features commonly seen in convenience stores, such as a coffee station for drinks for immediate consumption and a bakery oven where store staff prepare fresh bread and rolls throughout the day.

Environmental Strategy

Lidl aims to open a store with a solar-panelled roof and wind turbines in Dagenham, UK. The plans include 26 flats above the 1,165 square metre store, while the roof’s green design features 11 five-metre-tall wind turbines generating electricity for communal areas and 26 solar panels to heat up water for residents.

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