Lidl unveils £220m expansion drive as it creates 2,500 new jobs

Lidl will open 20 new stores in the next nine months, taking its store count in the UK to 620.

Lidl, which generated sales of £3.3bn last year, said jobs will be created across both new stores and existing shops as it seeks to improve customer service and up its credentials in fresh food.

The discounter is rolling out bakeries to all of its UK stores and is hiring for specialist roles such as bakery managers and ‘freshness coordinators’. New jobs will also be created at its Wimbledon head office across functions including buying.

The expansion programme comes amid a structural shift in the grocery sector that has resulted in the big four being squeezed by Lidl and Aldi at one end, and Waitrose at the other.  

In the 12 weeks to May 25, Lidl’s market share jumped from 3% to 3.6%. Its sales soared 20% in the 12 months to June 2014.

Over the same time Aldi’s share jumped from 3.5% to 4.7%, year on year. During that period, Asda was the only one of the big four grocers to increase its  share, from 17% to 17.1%.

The shift towards the discounters prompted Sainsbury’s to launch a joint venture with Netto, which was unveiled last week. As part of the partnership, 15 Netto stores are scheduled to open before the end of next year as Sainsbury’s fights back against the discounters.

Lidl UK managing director Ronny Gottschlich said: “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.

 “We’re focused on a single goal – giving our customers the freshest, highest-quality products possible at the best value. We operate on a highly efficient business model and source as much as we can locally because it supports UK producers and also limits the financial and environmental impact of transport.”

This September Lidl will open its ninth regional distribution centre after an £80m investment, to support its “surge in fresh product sales”.  Lidl said it has “significantly increased” the amount of space allocated to fresh fruit and veg, meat, poultry and fresh fish in store.

Fresh produce now accounts for 40% of Lidl’s turnover, up from 25% four years ago. Two thirds of the range is British. Lidl also exported more than £100m of British whisky and £30m of cheese from the UK in 2013.

Lidl’s expansion was welcomed by Chancellor of the Exchequer George Osborne.

Osborne said: “It’s great news that Lidl is investing in thousands of new jobs across the UK – each job means security and a better future for another family and the country as a whole. Our long-term economic plan is working, and as the economy is growing businesses up and down the country are feeling increasingly confident about creating jobs.”

This year’s investment follows the £170m ploughed into the business last year when Lidl opened 12 new stores, hired 3,500 new staff and refurbished stores to support its Freshness Campaign.