Lidl profits rise four-fold as shoppers aim to save money

PROFITS at Lidl have quadrupled as the supermarket claimed it took £58m of spending away from traditional grocers amid the cost-of-living crunch.

Lidl said it was “in the best possible position” going into winter and that it has an additional 770,000 customers each week compared with last year, as soaring inflation forces many households to switch to cheaper alternatives.

Profits at Lidl’s UK stores hit £41m for the year to the end of February, a 319pc jump from a year earlier.

The company was boosted by new store openings after it added 53 sites to its estate over the financial year, taking it to 918 shops. The supermarket chain is planning to have 1,100 stores in the UK by the end of 2025.

Lidl posted a 1.5pc increase in revenues during the period to £7.8bn. It said sales of party food for Christmas were currently up around 21pc on last year, as shoppers start to stock up early for the festive season. It comes ahead of a battle among supermarkets to attract customers this Christmas as households cut spending on groceries.

Stores are attempting to keep prices as low as possible even as they struggle with rising energy bills and surging labour costs.

Major retailers such as Sainsbury’s are opting to swallow more of the higher costs to prevent their customers switching to discounters, which typically offer cheaper prices.

Sainsbury’s, which is Britain’s second largest supermarket, earlier this month said its efforts to keep prices low meant it was seeing “less switching by customers to Aldi and Lidl than all other full choice supermarkets”.

Figures from Kantar earlier this month suggested that, despite moves to not pass through all of the higher costs, prices were going up across the board.

The data showed that grocery prices hit a 14-year high last month, taking the average annual supermarket bill to £682. Lidl warned that its costs could increase significantly as it grapples with a shortage of workers.

Last month, it raised hourly pay rates for a second time this year – a move which cost it around £50m – as businesses including retailers, pubs and restaurants compete for workers.