Lidl store front

Lidl store front

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Lidl has outpaced rivals in the run up to Christmas reporting a double-digit sales increase as customers shunned more expensive retailers.

Overall sales for the four weeks to 29 December rose 11% year-on-year, higher than any other supermarket over the festive period, with around £110m of spend switched to Lidl from all other grocers - including main rival Aldi. 

The discounter experienced increased customer footfall, with 23 December being its busiest trading day ever as households stocked up for Christmas Eve. 

Lidl said it experienced strong sales in its beer, wines and spirits range, with record growth of 13%. Wine was the “real winner” from the range, Lidl added, with sales jumping 20% year-on-year. 

Cheese sales also performed strongly, up 55% year-on-year, with Lidl customers consuming over 1,000 tonnes from Lidl’s festive range. 

The discounter also “bucked the trend” for general merchandise sales, increasing 9%. 

Christian Härtnagel, Lidl GB CEO, said: “This was our 25th Christmas since first opening our doors in Britain, and what a Christmas it’s been, with more customers shopping at Lidl than ever before.

“We continued to open our doors to more communities across the country, which has no doubt contributed to our success. However, the number of customers switching to us in the lead up to Christmas shows the continued appeal of the Lidl offer.”

Over the Christmas period the retailer also continued to invest in its store portfolio, as part of its £1.45bn expansion investment. It now expects to reach 1,000 shops across the UK by the end of 2023. 

“After more than doubling our market share over the past ten years, we’re excited to be entering a new decade and all the potential it brings for us. Our promise to customers will always be to provide the best quality at the lowest prices and we look forward to delivering this to even more households across the country in 2020 and beyond,” Härtnagel added.

Morning update

Sales at variety goods retailer B&M European Value Retail jumped in its all-important third quarter, though like for like sales were broadly flat.

B&M group revenues for the 13 weeks to 28 December rose 9.3% to £1.19bn mostly due to the opening of 12 net new stores. B&M expects to open further six stores in the year’s final quarter. 

UK store revenue growth amounted to 8.8% to to £957.4m, with 0.3% like-for-like sales increase, against the “backdrop” of a challenging retail market and the company’s decision not to engage in any early discounting activity.

Heron Foods, the business’ value-focussed frozen grocery chain, continued to “trade well”, the company said, with revenues growth of 6.2% to £95.6m and 5 new stores opened in the quarter.

Progress continued to be made at Babou, B&M’s French discount retailer, with revenues of £85m in the quarter. German arm Jawoll meanwhile, saw revenues down 1.5% as a strategic review of the business continues. 

“Against the backdrop of a difficult UK retail environment with reduced shopper footfall and political uncertainty, our core B&M UK business generated continued growth and delivered a record level of peak season sales,” said CEO Simon Arora.

“Overall the business delivered a good quarter operationally. Costs were well controlled and, combined with our usual strong focus on cash gross margins, yielded a profitable outcome. We were also able to exit the period with normal seasonal inventory levels. Our new store programme delivered 15 gross and 12 net new B&M UK stores in the quarter, and this year’s openings as a whole have performed better than expectations.”

In this week’s issue of The Grocer read about Irish food group Valeo’s positive outlook with the brand claiming it has hit over £1bn in sales as well as “fake” meat brand This raising £4.7m as it seeks to keep-up with demand for its meat alternative products.

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The FTSE 100 opened in the green, rising 0.1% to 7,608.86pts.

Early risers included Imperial Brands (IMB) up 1.5% to 1993.80p, Hilton Food Group (HFG) up 1.7% to 1,102p and Coca Cola HBC (CCH) up 0.7% to 2,645p.

Fallers saw Tesco (TSCO) open marginally lower at 253.20p, Morrisons (MRW) down 1.3% at 191.95p and Marks & Spencer (MKS) down 0.4% at 193.70p. 

Yesterday in the City

The FTSE 100 closed 0.3% higher at 7,598.12pts as tensions eased between the US and Iran.

Tesco (TSCO) closed 0.8% higher ending the day at 252.90p after it emerged as the winner of Christmas among grocery retailers despite a marginal 0.4% sales rise.

Marks & Spencer (MKS) ended on the opposite end of the index, closing 11% lower at 195.10p after a disappointing performance of its Clothing & Home business affected the retailer’s overall Christmas trading and led to renewed fears about the company’s restructuring programme’s effectiveness.

Sainsbury’s (SBRY) meanwhile ended down 1.1% at 224.60p, Morrisons (MRW) up 0.6% at 191.95p and Greggs (GRG) down 0.2% at 2,430p.

Unilever (ULVR) rose 1.1% to 4,285.50p, Diageo (DGE) closed 1.3% higher at 3,249p and Just Eat (JE) 1.9% at 884.40p.