Discount supermarket Lidl swung to a £76 million ($95 million) loss in Britain as it held down prices and grew market share in the country’s fiercely competitive grocery sector.
(Bloomberg) — Discount supermarket Lidl swung to a £76 million ($95 million) loss in Britain as it held down prices and grew market share in the country’s fiercely competitive grocery sector.
Sales rose almost 19% to more than £9 billion in the year through February as the German chain attracted an extra 1.4 million shoppers and opened more stores than any other supermarket. However, it sank to the loss after reporting a £41 million profit the previous year.
“The entire retail market has seen inflation and we are no exception,” said Ryan McDonnell, chief executive officer at Lidl GB. “However, for us, what is important is that our price gap to the traditional supermarkets is as strong as it has ever been.”
Margins tend to be razor-thin at discount retailers, making it easy to slip into losses if consumers aren’t willing to accept higher prices even as global costs rise.
Shoppers have been turning to discount retailers Lidl and Aldi as the cost-of-living crisis stretched budgets. Both German chains have seen their market share soar, with Aldi becoming the UK’s fourth biggest grocer and Lidl getting close to catching up with Morrisons too.
However, their growth in market share finally stalled in recent weeks. Data firm Kantar said Lidl had 7.6% of the market in the 12 weeks to Sept. 3, with Aldi on 10.1% — both were down 0.1 percentage point compared with August’s reading.
Read More: Britain’s Grocery Price Inflation Eases Slightly Lower
Stiil, McDonnell said Lidl sees the potential for hundreds of new stores across Britain. “There is no ceiling on our ambitions,” he said, in comments published along the results.
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