Lidl UK: London focused expansion

Date : 12 June 2019

Lidl has announced that it will be investing £500m in expansion in London over the next five years. 

What the growth will look like

  • 40 new stores in London
  • The first central London store will be on Tottenham Court Road
  • New locations will be in Alperton, East Acton, Hackbridge and Watford amongst others
  • Lidl has shrunk its minimum size requirement for the new store openings

According to the BBC the chief executive officer of Lidl, Christian Hartnagel has said;

"London is at the heart of our growth plans across Great Britain."

The investment will also include opening a new head office in Tolworth (south-west London) and expanding its Belvedere distribution centre (east London). A new distribution centre is also set to open in Luton, becoming Lidl's fourth site to service Greater London.

Lidl currently has 88 stores within the M25, but none in central London. Expansion in all city centres, but particularly London, is often challenging for discounters. It is difficult to find the larger sites with car parks that they typically target. There is a sizeable opportunity for growth, however competition for the best sites is intense. Our ShopperVista data shows 53% of London shoppers would use an Aldi or Lidl more if there was a store closer to them.

Subscribers can read more about this is in UK discount: factors influencing future growth.

Discounter format development

We have seen Lidl open several new store designs across Europe as it expands its presence, and target different shoppers. The retailer started testing smaller formats in 2016 in Amsterdam, and in February 2019 opened its smallest store in Germany. That store is 503 sq m, less than half the traditional size and offers 80% of the standard range. Most categories are reduced, but the store still carries the retailer's entire fresh food offer. Four stores in this format will be opened throughout 2019 in Munich.

Other discounters are also testing new formats. Most notably, Aldi opened its first ever 'Local' store in Balham, London in March 2019. The store is around 600 sq m, half the size of a typical Aldi, and has a reduced range.

In Europe;

  • German discounter Norma is building larger stores and increasing its range. It will be adding around 160 SKUs to its existing range, mainly in chilled and fresh. The retailer is looking to emulate Aldi and Lidl's larger stores
  • Italian retailer Eurospin is also trialling a larger format, with greater space dedicated to fresh, including a bakery and butchery

Want to know more about Lidl's developments?

The retailer is continually developing its proposition. It has recently announced that it will be exploring ecommerce in the UK for the first time.

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