Lidl is effectively conceding the battle to be the UK’s dominant discounter by dramatically slowing store openings this year, its former boss has said.
The only way for it to catch up with Aldi would be by opening 50 stores more than its rival each year for several years, according to Ronny Gottschlich, who was Lidl’s UK CEO from 2010 to 2016.
“If not – and I believe this is the indication – they will have to resign to the fact Aldi is going to be and is going to stay the UK’s strongest discounter,” he told The Grocer.
The Grocer revealed earlier this month that Lidl had said it was targeting just 25 new stores this year instead of the usual 50, to focus investment on distribution capacity. It maintains 25 is the projection, though property sources have told The Grocer the unofficial number coming from the retailer is eight, and only sites already agreed to are likely to be completed.
Meanwhile, Aldi this week said it was “ramping up efforts [to expand] as others scale back”, as it announced an ambition to “almost double” its 60-store London estate. It was its second clear signal of intent within days, having last week it announced it would create more than 6,000 new roles this year, including 450 in distribution centres.
Aldi told The Grocer about 40 stores were scheduled to open across the UK in 2023.
It made the timing of the slowdown a missed opportunity for Lidl, said Gottschlich.
“This should have been the time when they say, once and forever, we want to become the dominant player,” he said. “They should be opening 40-50 stores more a year, to catch Aldi, to change the perception that Aldi is the biggest discounter in the country.”
The only way to catch up would be “if Aldi opens 30 stores a year and Lidl says we’ll opens 80 a year, for a period of five to seven years. Only then do I believe they would stand a chance”, said Gottschlich.
“I don’t see an indication of how Lidl would turn this back. They would really have to invest in 50 more store openings a year than Aldi, rather than 50 less.”
Other sources have pointed out Aldi’s pace of openings has also slowed. Its estate has been at ‘over 990 stores’ – about 40 more than Lidl – since the start of the year. It has also yet to confirm a date for the opening of its 1,000th store, a landmark it had aimed to hit last year.
Its latest communications say the 1,000th will come “later this year”.
One source also questioned Aldi’s expansion numbers for 2023. “Where are the 6,000 new jobs being created this year?” the source said.
“If 450 are for warehouse – and presumably head office roles will not be in the thousands – it would be safe to assume that about 5,000 are for stores, which would suggest they’re planning to open over 100 new stores this year.”
An Aldi spokeswoman said: “The 6,000 jobs cover a wide range of areas across the business, including everything from new stores, upgraded and refurbished stores, head office roles and regional distribution centre jobs.
“The 450 RDC roles are just the current jobs, so there will be more throughout the year, while Aldi will also be recruiting for a number of new jobs in current stores to support increased demand.”