Christmas ads face “a lot of uncertainty” this year, thanks to restrictions on what products can be shown, Lidl GB chief Ryan McDonnell has said.
Under new restrictions, TV ads before the 9pm watershed must not show products high in fat, sugar or salt (HFSS), which also face a total ban from paid-for online advertising.
The restrictions were due to be mandated from 1 October but instead have been adopted under a voluntary industry agreement from the same date, after government delayed implementation of the legislated ban to next year.
It means swathes of products that would traditionally be the mainstay of supermarket Christmas ads are due to be missing during prime-time TV slots, while companies’ own websites and social channels may be among the few places they can appear online.
However, McDonnell said it “remained to be seen” how the rules would play out.
“It would be an understatement to tell you that we’re obviously learning very quickly, and there’s a lot of uncertainty around what the rules of play are, and that’s across traditional media and social,” he told The Grocer.
“There’s no doubt we’ve had to engineer our ads differently and be a lot more conservative, because there are so many products and categories that fall under HFSS regulation.
“So, it’s going to be interesting. Obviously, with Christmas upon us and retailers increasing their media spend, we’re going to have to see how the market plays out. There will be some interesting learnings.”
McDonnell spoke as Lidl announced annual results this morning, revealing pre-tax profit more than tripled to £156.8m in the year to 28 February 2025, while operating profit shot from £220.8m to £314.1m.
Revenue climbed by 7.9% to £11.7bn, as 38 million more shopping trips were made with Lidl, according to the discounter.
Business rates
McDonnell also urged Rachel Reeves not to heap more taxes on retail in the budget, and said he believed government had “listened” to calls to exempt shops from a proposed business rates surtax on the largest properties across all sectors.
The Chancellor is under pressure from retail over the planned business rates surtax, which is intended to pay for a rates discount for smaller properties in retail, hospitality and leisure. Calls have been growing in recent days from the convenience sector – including the Co-op – for small shops to be given the maximum discount possible, while major retailers have been demanding exemption from the surtax that is intended to subsidise it.
With Lidl and Aldi having much smaller stores than traditional supermarket rivals such as Tesco, far fewer of them are expected to be exposed to the surtax, while many are in line for a business rates discount.
McDonnell said: “I’m looking ahead for the next financial year with my team and analysts.
“The proportion of business rates in our P&L is going to remain the same – there’s no benefit – as long as we’re excluded from this [higher] multiplier effect, which we think government has listened to.”
He added: “We’ve been very communicative with government, not just ourselves individually, but through the BRC.
“On the back of last year, with the National Insurance [increase], and the ongoing discussion around business rates, we’ve been very clear that we’ve got to be careful that we don’t pile more inflationary pressure on business, especially in the current climate.
“We think those discussions have been quite productive. I’m quite hopeful that the government will see sense around not inflicting more inflationary pressure on business.”
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