Lidl profits soar as customers switch millions of pounds to discounter

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Lidl profits and sales have soared as deepening food inflation and the worsening cost-of-living crisis have seen hundreds of thousands of customers a week making the switch from supermarkets to the discounter.

Ryan McDonnell

Ryan McDonnell said Lidl’s business model ‘is built for the long term’

The discounter said £58m worth of spend, equivalent to more than 770,000 shoppers, had switched from the traditional big four supermarkets to Lidl last week compared to the previous year, in a bid to save money on their food spending.

In a trading update accompanying the publication of its full-year results, covering the 52 weeks ending February 28, the discounter said 60% of UK households were doing at least part of their shop at Lidl.

Lidl said it would offer the lowest prices of any supermarket this Christmas and that it had noticed an uptick in customers stocking up for the festive period. Sales of Lidl’s Partytime range were up 21% and its Panettone was up 8% versus the previous year, while the discounter said it also currently has the largest supermarket share in British pork sales.

Profit before tax for the period jumped to £41.1m, up from £9.8m for the 2020/21 full year, while revenues were up 1.5% year on year to £7.8bn.

EBIT was up 80% to £79m, while Lidl invested £653m on land and fixed assets during the period, as it ramped up its new store opening programme.

Ryan McDonnell, Lidl GB chief executive, 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 5 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.

“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.”