Lidl expansion ‘masks 5pc slump at older stores’
LIDL’S rampant growth in the UK is stalling as sales have slumped by around 5pc at the discounters’ shops that have been open for more than a year, according to new analysis of industry figures.
The slowing sales raise fresh speculation about the reasons for the abrupt departure of Lidl’s former UK chief executive, Ronny Gotts- chlich. Last month Mr Gottschlich unexpectedly resigned after 16 years with the German retail chain and was replaced by the head of the supermarket’s Austrian business with no explanation given.
Earlier this week, data by Kantar Worldpanel revealed Lidl and its German discounter peer Aldi were continuing to grow market share, adding around 60 to 70 stores a year. However, analysts and retail sources have said that Lidl’s market share of 4.6pc, compared with 4.3pc the year before, and a total sales rise of 8.4pc, could mask the true picture of likefor-like sales – an industry benchmark that measures sales at stores open for more than a year.
Clive Black, analyst at Shore Capital, said that the Kantar figures and Lidl’s shop opening rate “would imply a collapse of samestore trade at Lidl of maybe minus 4pc to 6pc”. “Perhaps the data is rogue but it would correspond quite remarka- bly with significant and surprise management change at the organisation,” he said.
Aldi and Lidl now control 10.8pc of the UK’s grocery market and have plans to open five times as many new stores as all their “Big Four” rivals combined.
Analysts at Bernstein meanwhile have consistently argued that sales at the discounters’ older stores have fallen into negative ter- ritory and the Germanowned grocers are flattering their numbers with new shops.
In June Aldi’s chief executive Matthew Barnes insisted that like-for-like sales were still positive but said that same-store sales were not an “accurate measure” for the company, which is primarily focused on boosting UK shop numbers to 1,000 by 2022.
Lidl refused to comment.
‘The data would correspond to a surprise change in management’