27th Jun 2014 12:07
LONDON (Alliance News) - German discounter Lidl upped the pressure on the big UK supermarkets Friday after it said it will be investing GBP220 million on building 20 new stores in the UK by the end of the year, a move that it said it will create 2,500 new jobs.
Lidl said the investment is part of its national expansion programme, as it plans to increase its UK store portfolio to 620 stores by the end of 2014, from 600 stores in 2013, when it spent GBP170 million on new store openings.
The German retailer set up shop in the UK back in 1994, and since then has grown to more than 600 stores in England, Scotland and Wales.
The expansion follows four years of growth in sales and profitability for Lidl in the UK, as it continues to gain market share from the UK's four biggest supermarket chains.
The UK grocery sector has been dominated by four big players in recent decades. However, since the financial crisis, shopper habits have been changing and those players - Tesco PLC, J Sainsbury PLC, Wm Morrison Supermarkets PLC and Wal-Mart Inc-owned Asda - have been losing market share to the likes of Aldi and Lidl at the bottom end of the market, and Waitrose and Marks & Spencer Group PLC at the premium end.
Only last week, Sainsbury's moved to capture a share of the growing UK discount grocery sector, and fight back against the recent success of Aldi and Lidl, by creating a joint venture with Danish international discount grocery retailer Netto in the UK.
Sainsbury's, the UK's third-largest supermarket chain by market share, said the joint venture will initially trial 15 stores in the north of England by the end of 2015, starting this Autumn, and then roll out across the UK if the trial is successful.
In 2013, Lidl recorded GBP3.3 billion in revenues, and sales continue to increase as it takes a bigger slice of the UK grocer sector.
"This latest phase in our growth is a testament to the continuing success of Lidl in the UK. People all over the country are realising they can make huge savings on their weekly grocery shop with us, without compromising on quality," said Lidl UK?s Managing Director Ronny Gottschlich in a statement.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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