Thousands more shop at Lidl as inflation hits households
LIDL has declared that around 770,000 more people are shopping in its stores every week than last year as consumers flock to the discounter amid the cost-ofliving crisis.
The German-owned grocer, which has110 stores in Scotland, reported that shoppers have switched £58 million of spend to Lidl from traditional supermarkets. This has come as households seek keener prices at a time when inflation and interest rates are spiralling up.
UK annual consumer prices index inflation increased to 11.1 per cent in October, official figures published this week showed, driven by rising energy bills and the cost of food and drink. Interest rates now stand at 3% following a three-quarter percentage point rise by the Bank of England earlier this month.
Lidl, now the UK’S sixth biggest grocery retailer, reported a hike in pre-tax profits to £41.1 million from £9.8m in the 52 weeks ending February 28, while earnings before interest and tax surged by 80% to £79m. Profits increased as Lidl saw revenue climb by 1.5% year-on-year to £7.8 billion. Revenue was up 13% compared with the same period two years ago.
However, the retailer cautioned that supply-chain pressures persist and that there is “no assurance” that the issues will not worsen in the future, which could further increase costs. The company also said it has been affected by labour shortages caused by Brexit and following the pandemic.
Ryan Mcdonnell, chief executive of Lidl GB, said: “As the cost-of-living crisis deepens, we are more focused than ever on supporting our colleagues, our customers, and the communities we serve.
“This year alone we have invested £50m raising hourly pay rates making us the highest paying retailer, we’ve donated five million meals, and we’re serving over 770,000 more customers a week compared to last year.
“As a discount supermarket we are in the best possible position to support people through these challenging times, and it’s our absolute priority that we continue to do so.”
Lidl, part of European retail giant the Schwarz Group, reported that it had increased hourly wages from a minimum of £9 to £9.30 outside London and from £10.55 to £10.75 within the M25 during the period, moves that it said had benefitted more than 19,000 employees.
Pay rates at Lidl were further increased in October, to £10.90 outside London and £11.95 within the M25.
As well as increasing wages, Lidl highlighted investment of £653m in fixed assets, including to open more than 50 new stores over the period and in its Luton and Belvedere distribution centres.
The company now has more than 28,000 employees across the UK working in around 935 stores and 13 distribution centres in Scotland, England and Wales.
Mr Mcdonnell added: “Our business model is built for the long term and I’m incredibly proud of our continued growth in recent months, which builds on our strong performance across 2021.
“During this time, we’ve made further investments across all areas of our business, building even more stores and distribution centres, hiring more colleagues, increasing pay rates, investing in our British supplier base and contributing to the communities we operate in.”
Lidl said consumers are already stocking up on its Christmas “essentials”, with sales of its party food range up 21% and panettone 8% ahead of last year.
Our business model is built for the long term