Schwarz Group 2019/20 results: growth acceleration, Lidl +9.5%  

Maxime Delacour
Senior Retail Analyst
@RetailAnalysis

Date : 30 July 2020

Schwarz Group reported a net sales increase of 8.6% to €113.3 bn for its financial year 2019/20. Lidl posted one of its strongest growths in the recent years with net sales up by 9.5% while Kaufland sales grew by 4.5%.

The group maintained its expansion pace with 400 store openings, similar to 2018/19, reaching 12,500 stores in 33 countries.

Lidl: sales growth accelerates

The discounter sales increased by 9.5% to €89 bn during its fiscal year 2019/20. This is an improvement of 0.7 points compared to its 2018/19 growth rate. It generated an additional €7.8 bn of sales across the 29 markets where it currently operates.

During this fiscal year, Lidl continued its fast network expansion plans globally and reached 11,000 stores in November 2019. In 2020/21 we expect the retailer to enter Latvia and potentially Estonia, following earlier announcements and the completion of a distribution centre in Latvia in July 2020.

 

Source: IGD Research

 

Improved performance from Kaufland

Kaufland saw sales increased by 4.5% to €23.7 bn compared to a growth rate of 1.6% a year before. The group hasn't shared much details regarding the reasons of these good results. It can potentially come from the improved perfromance in Poland and Germany and the continued good sales in Romania. This positive trend might strenghten further in 2020/21 following the retailer’s decision to stop its market entry in Australia in January 2020 to better focus on its European operations. 

Lidl: five areas of focus for 2020

  • Network expansion: store opening plans are not being put on hold. Various announcements confirmed the objective is to maintain the pace of expansion across Europe, including the potential market entry in Latvia by the end of the year
  • Low prices: the different Lidl operations have started to lower the prices of private label products. The marketing messages are increasingly focusing on the everyday low prices and promotional offers on branded products. We expect a greater focus on the efficiency of the supply chain and the in-store operations (stock monitoring, self-checkouts)
  • Digital: the roll out of the Lidl Plus app (loyalty programme) will continue. In July, Ireland became the 10th market where the discounter launched the app. We expect the app to play a key role in the retailer’s more shopper centric strategy. It will be a strong tool of communication for promotional offers
  • Ecommerce: the lack of ecommerce operations proved to be a weakness during the lockdown. The retailer is expected to accelerate its development and tests across Europe within the next twelve months. It currently tests click and collect in Poland. Partnerships with online specialists, such as Buymie in Ireland and Lola Market in Spain, could be agreed in other countries
  • Brands and private labels: a growing number of major or local brands is being listed to cover more needs and drive footfall in-store. The discounter continues to evolve and expand its private label assortment with a focus on the latest trends, such as local sourcing, healthy food, free-from and vegetarian food products

Looking for more insight?

Please have a look at our Lidl hub and Kaufland hub for more content. Retail Analysis subscribers can also access various insight reports, including:

 

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