Lidl managing director Ronny Gottschlich said the grocer is going “full steam ahead” to take advantage of the consumer shift towards discount grocery.
The German grocer revealed this morning (June 27) that it is planning to open 20 stores in the next nine months to take Lidl’s store count in the UK to 620. At its Chessington store today Gottschlich said: “I do see there is a shift in the market. There is some momentum in there and we will work hard to keep that.
“People have realised, in the last two or three years especially, that very reasonable pricing doesn’t have to come with a lack of quality products. I think people really realise British quality fresh produce can come at incredible pricing. We’re seeing more and more A and B customers through our doors these days and that really fills us with confidence. And not just doing a top-up shop but a weekly shop. Trolleys are filled to the rim. It’s very positive.”
Gottschlich said he was “surprised” to learn that Sainsbury’s has agreed to launch a joint venture with Danish discounter Netto, which was unveiled last week. “I was surprised that there’s a competitor going with another competitor,” he said. But he added he could not yet “build an opinion” before the first Netto store opens. He said: “We believe in our offering. It is unique and is strong.”
He said he believes Lidl’s popularity will continue to rise even as the economy turns a corner.
“If you’ve once experienced the quality of fresh produce in our stores, and you’ve saved a lot of time by the convenience store shopping and a lot of money, why would you turn back?” he said.
He said stores in affluent areas such as Dorking are performing “tremendously well”. He added 10 years ago Lidl “would have maybe struggled” to open a store there.
Gottschlich was launching a £220m expansion drive as the grocer invests in new shops, its fresh food offer and an extra 2,500 staff. Lidl has a long-term goal of reaching 1,200 to 1,500 stores in the UK.
He added that despite having a giant owner, Schwarz-Gruppe, Lidl feels entrepreneurial due to, what Gottschlich describes as, its flat hierarchy. “We are almost feeling in our spirits like we are a start-up business sometimes,” said Gottschlich.
Chancellor George Osborne was also at the Lidl store to help launch the investment programme.
He said retail is “hugely important” to getting the economy back on track.
Osborne told Retail Week: “It’s hugely important because it creates so many jobs and we’ve got this great announcement today from Lidl. It’s great meeting people here from store managers and district managers down to people working on the counters as there’s a great career plan here and great training so they’re a very important part of the British recovery.”
He added that Government policies were helping retailers. “We’ve got a good business rates package, we’ve held down the rates increase this year, we’ve got help for the high street this year and we are also cutting business taxes,” said Osborne. “And from next year we’ve got no jobs tax if you employ someone under the age of 21, and of course for a supermarket, they’ve often got a lot of staff under the age of 21.”
The Government has come under fire for delaying a review into the business rates system until 2017 and for pushing back the rates revaluation to the same year.