Lidl | Verdict Company Briefing

Lidl is a leading European hard discounter owned by the German based Schwarz Gruppe. Its pan-European operations comprise more than 9,000 outlets spanning 26 countries. Lidl entered the UK market in 1994. Since then it has established a strong national presence with a chain of around 600 stores. We estimate Lidl’s UK sales will reach £2.6bn in 2012.

• Benchmark your performance in food & grocery with detailed key performance indicators across sales and space data for Lidl
• Plan your expansion strategy by understanding how and where Lidl has increased its store portfolio, and the impact this has had on densities
• As a planner, assess the viability of an Lidl store by examining its sales densities, and understanding its expansion plans

In April 2012, Lidl revamped its fresh meat range with the Red Tractor mark and Union Jack themed packaging, to promote the provenance of it's fresh meat and poultry. A Red Tractor audit in 2012 found that 100% of its fresh meat and poultry carried the mark designating compliance to the scheme which looks at standards, welfare and the environment.

Lidl has introduced fresh fish into its stores, with the retailer trialling fresh cod, haddock and salmon in its store in Weston-super-mare in Somerset in March 2012. The move complements the retailer's decision to roll out instore bakeries and improve its meat offer, focusing on product quality to attract more affluent customers

• How will Lidl's food & grocery sales grow in 2013, and what impact will this have on market share
• What are Lidl's plans for expansion over the coming years, and how will this contribute to sales growth

Table of contents

OVERVIEW
Introduction
Summary
Space growth continues as Lidl looks for larger stores;
Improves service and quality;
But margin shrinks as profits dive once more;
Will struggle to maintain visitor share post recession;
Growth will slow in food & grocery sales as retailer approaches critical mass;
Market share growth set to slow;
But quality and service must continue to guide strategy.

LIDL
Quality must guide strategy
Verdict outlook
Will need to fight to retain visitor share post recession
Recent key events
Aims to improve quality
Proposition & customer penetration
Popularity with more affluent consumers rises
Financials
Margin shrinks as profit dives once more
Sector performance – food & grocery
Growth slows in food & grocery sales as retailer reaches critical mass
Market shares
Market share set to stall as growth slows
Space
Space growth continues as Lidl looks for larger stores
Methodology
Verdict company briefing
Financial information
Market size calculation
Sales density calculation
Further reading
Ask the analyst
Disclaimer

TABLES
Table: Lidl company information 2012
Table: Lidl retail proposition 2012
Table: Lidl key operating statistics 2008–13e
Table: Lidl trading record 2003–13e
Table: Lidl key space statistics 2003–13e
Table: Lidl space allocation 2010–12
Table: Lidl space allocation 2010–12

FIGURES
Figure: Lidl fascia 2012
Figure: Lidl award winning products 2012
Figure: Like Meat, Love Lidl campaign 2012
Figure: Inismara range of fresh fish in Lidl Ireland and Northern Ireland 2012
Figure: Irish iteration of the Lidl instore bakery 2012
Figure: Lidl's Facebook activity 2012
Figure: Lidl iPhone App 2012
Figure: Lidl visitor share by social grade 2005–12
Figure: Lidl UK sales and y-o-y change to December 2008–13e
Figure: Lidl UK operating profit to December 2006–11
Figure: Lidl food & grocery sales incl VAT for calendar years 2008e–13e
Figure: Lidl food & grocery sales incl VAT per sq ft for calendar years 2008e–13e
Figure: Lidl share of market held by food & grocery retailers 2008–13e
Figure: Lidl share of market for food & grocery products 2008–13e
Figure: Lidl space allocation changes 2010–12
Figure: Lidl space allocation percentage point change 2010–12

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