Lidl to scale back store openings and focus on warehouse capacity

Lidl is reportedly planning to slow down its store opening programme as it instead focuses on growing its warehouse capacity.

According to The Grocer, the supermarket intends to only open 25 new stores this year, having previously opened around 50 stores a year for several years, with 54 new openings reported in 2022. 

The group had previously revealed a target of operating 1,100 stores by the end of 2025, up from the c.950 it currently operates.

A Lidl spokesperson told The Grocer: “In 2023, we are opening 25 stores, which equates to one a fortnight. Whilst this is a slowing on store openings, we are focusing on investing heavily in our warehouse capacity: opening Luton, completing extension works on our Bridgend and Belvedere sites, and looking for a new site for the south.”

According to The Grocer, the plan could lead to an unconfirmed amount of redundancies.

The spokesperson added: “We are currently looking at making a small number of changes within our central services team, including the creation of new strategic roles. We are supporting the colleagues impacted by these changes and offering alternative roles, where appropriate.”

The slowdown of store openings comes despite the fact that Lidl’s pre-tax profits quadrupled to £41.1m in the year ending February 2022, as more customers turn towards discount supermarkets amid the cost of living crisis.

Lidl also reported revenues of £7.8bn, up from £7.7bn for FY20/21, a rise of 1.5%. This was also a 13% increase on its pre-pandemic revenue which was £6.9bn.

The company said it believes that these increases were fueled by consumers switching to them instead of the four traditional supermarkets as a way to save money in the current climate.

According to Lidl, consumers have switched £58m to them from the traditional four supermarkets, and nearly 60% of customers are choosing to shop at Lidl for its discounts.

Lidl has been contacted for further comment.