Aldi store

Source: Aldi

As their estates grow, it will become increasingly difficult for Lidl and Aldi to find suitable sites in a battle for remaining space, according to Maximise UK

Lidl and Aldi face an uphill battle to hit their store network expansion targets amid planning delays and essential building materials shortages caused by the pandemic.

Aldi last year missed its annual target of 50 new stores, opening 37 amid delays to construction work.

Lidl met its 2020 target of opening a store a week despite also facing delays, with construction at its recently opened Richmond store reportedly halted in lockdown last year.

The construction industry has seen huge demand growth thanks to a boom in home improvements and a year-long stamp duty holiday for home buyers introduced last July. Meanwhile new supplies have been affected by logistics chaos caused by Covid and Brexit.

Retailers are also facing delays in securing planning permission, with many council staff working from home.

Location analytics firm Maximise UK this week highlighted longer-term issues, saying Lidl and Aldi will need an additional 12 to 24 months to hit their targets of 1,000 stores by 2023 and 1,200 by 2025 respectively. Lidl currently has about 860 while Aldi has 920.

Maximise UK matched the profile of the discounters’ existing estates to its database of 70,000 retail locations across the UK.

The analysis identified a reluctance of both discounters to trade within 2km of their own stores, and a preference for being at least 1km apart from each other.

As they near their targets, it will become increasingly difficult to find sites far enough apart in a battle for remaining space, said Maximise UK.

“One thing that really stood out in the analysis is their trading overlap, and that is starting to intensify,” said Maximise UK CEO David Haywood, former Somerfield head of store location.

“Once you put another few percentage points on these store numbers, that’s the real break, as it gets harder fitting in around yourself.

“You’ve also got the likes of Home Bargains and B&M hunting down these locations, and then there’s the new Russian discounter Mere looking for space.

“Maximise UK estimates it will take 12 to 24 months longer [than anticipated] to reach these targets as the challenges become more prominent.”

The analysis found only 6.4% of Aldi stores fell within 2km of another Aldi store. For Lidl, the figure was 10.4%. Meanwhile, the combined number of Aldi and Lidl stores within 1km of each other was 152, out of a total combined estate of about 1,800.

Last week, Lidl took the unusual step of announcing its latest annual property requirements brochure to national media including The Grocer. It is thought to be a potential sign of intensifying competition for space between the two discounters, coming a week after Aldi announced its latest site requirements to regional media.

Commenting as the requirements were announced, Lidl GB CEO Christian Härtnagel said: “We are calling on developers and landlords up and down the country to help find potential sites for us to build Lidl stores, which demonstrates the continued ambition we have to further expand our store portfolio across the nation.”

A Lidl spokesman said: “Our store expansion plans have continued at pace, despite the challenges of the past year, and we are proud to have been able to meet our ambitious target of opening on average one new store per week across Great Britain. We remain on track to open 50 new stores this year and meeting our 1,000 store target by the end of 2023.”

Aldi also maintains its expansion plans and store targets are on course and remain unchanged.