The GB arm of German discounter Lidl set an aggressive target for 1100 stores by the end of 2025, creating 4000 new jobs, as it reported record annual sales up 12% to £7.7 billion. It currently has around 880 outlets.
Rival Aldi, which notched up revenues of £13.5 billion in the UK and Ireland in 2020, has around 940 UK stores with ambitions to reach 1200 by 2025.
Lidl’s latest drive to expand its footprint in England, Scotland and Wales, came as Amazon opened its eighth till-free grocery shop in London.
The Amazon Fresh outlet is just a few minutes walk from where Tesco launched its first checkout-free branch in High Holborn.
The US online retail giant made its UK bricks-and-mortar debut in March, and is expanding rapidly, reportedly eyeing up to 260 shops.
Supermarkets were classified as “essential” retailers during the Covid-19 crisis and allowed to stay open, helping profits swell. The UK grocery sector is worth £133 billion per year, according to Kantar.
Independent retail analyst Nick Bubb said Aldi and Lidl look confident “about focusing on the High Street for their store-first model”.
Lidl GB chief executive Christian Härtnagel told the Evening Standard: “We can see that customers are coming when we open a store, and they have all been successful openings.”
He added: “We have a strong presence in London and will further increase that.”
Lidl opened its first UK outlet in 1994 and now employs 26,000 employees here.
Härtnagel said: “We continue to see tremendous opportunity in the market.”
Lidl was among businesses to have built up profits as trade soared during lockdowns.
Ahead of the coronavirus crisis the retailer recorded a £25.2 million pre-tax loss after heavy investments.
But fresh accounts for its GB division show in the 12 months to February 28 2021 it recorded a pre-tax profit of £9.8 million. It repaid more than £100 million in business rates relief received.
On supply chain and labour shortage challenges, Härtnagel said: “It will be a good Christmas, but it will be much more hard work for our teams.”