Lidl is stepping on the accelerator of its expansion in Spain and by 2024 it will invest 1,500 million euros to open 150 new stores and four logistics platforms that will be added to the 630 supermarkets and eleven logistics platforms that it already has spread throughout the country. The corporate director of Lidl Spain, Ferran Figueras, announced this investment plan during the presentation of the “Corporate Impact Report 2020 of Lidl in Spain”, carried out by the consulting firm PwC.
Lidl is the third chain by sales in Spain, after Mercadona and Carrefour. But according to Kantar data, it is one of the companies that grew the most last year, with a share that reached 6.7%. The data indicates that 60% of Spanish buyers pass through Lidl at some point, thanks to the expansion plan developed that has provided it with great capillarity.
Carrefour has a market share of 9% and Mercadona 25%. Together with the regional firms, Lidl and Aldi are the supermarket chains with the most dynamic growth rates on a national scale, due to their commitment to new openings and the promotion of local and national products that are boosting their market share.
After a biennium 2020 and 2021 marked by the closure of hotels and restaurants, which prompted the transfer of spending from families to distribution chains, Figueras has assured that the arrival of normality has not caused the expected negative impact on the sale of food products thanks to the “customer loyalty” strategy and the adaptation to the needs of a new post-pandemic consumer, who has changed his habits and is able to pay more for local products. And it is that Lidl has made an effort in Spain in recent years to strengthen ties with local suppliers, ranchers and farmers. In this way, the firm has managed to reduce costs by improving the general image of the chain in a context of strong competition.
5,000 million turnover
The last fiscal year, which ends this February, the company hopes to reach 5,000 million euros in sales. Figueras has reported that between 2019 and 2020 Lidl’s sales increased by 9.7% to reach 4,825 million euros while profits went from 176 million to 151 million, with a drop of 13%. Figueras adds that in the face of inflation “we are the guarantors that our prices are as competitive as possible”, and that is why the firm is “making every effort to contain prices” in a context of rising costs. Hence the lower benefit sacrificed to the promotional effort to contain prices and the security measures that had to be implemented as a result of the pandemic.
The chain faces 2022 as an exercise in “growth, investment and job creation.” “In Spain we see the potential to continue growing, we have room for growth and we want to go to that rate of 40 openings per year in the coming years,” stressed the manager. It will also continue betting on boosting its growth in the online channel, especially with increases in bazaar products with a fixed assortment, while for the moment it is not considering entering the Internet sale of food products. Lidl’s workforce was 139,000 jobs in 2020. For each direct job, Lidl generates around 7.2 indirect jobs, according to calculations by the consulting firm PWC.
Contribution to Spanish GDP
In the midst of the health crisis, Lidl redoubled its purchases and employment in Spain, as well as its commitment to the purchase and export of Spanish products to the more than 11,500 stores that the chain has in 30 countries. As a result, the company contributed more than 6,500 million euros to the national GDP, both directly, indirectly and induced, which already represents 0.64% of the total, with an average growth of 9.5% during the last 4 years. A fact that, in the opinion of Figueras, “reflects the important role that Lidl’s activity plays in Spain.”
According to the report by the consulting firm PwC, Lidl’s contribution represents, for example, more than three times the direct contribution of the computer, electrical appliance and optical products manufacturing sector (1,784 million euros) or more than a fourth part (0.26%) of the direct contribution of the food and beverage manufacturing industry (25,236 million euros). An economic footprint that has spread throughout the Spanish geography and has been characterized by capillarity. Not in vain, despite the fact that the impact on GDP has been greater in absolute terms in provinces such as Madrid, Barcelona, Murcia, Valencia and Almería, the contribution of Lidl’s activity to GDP in relative terms has been especially relevant in provinces such as Almería (3.24%), Murcia (2.14%), Huelva (1.55%), Palencia (1.41%) and Castellón (1.24%).
Promoter of the Spain Brand
One of the keys to the positive impact that Lidl’s activity has in Spain is its continuous commitment to national products, which it not only markets in its Spanish establishments but also in its network of more than 11,500 stores in thirty countries, which It generates directly, but especially indirectly and induced, a significant volume of wealth and employment in the country. Since its arrival in Spain in 1994, the company has acquired national products worth more than 50,000 million euros and has established itself as one of the main export platforms in the Spanish agri-food sector.
In 2020, Lidl increased the export of Spanish agri-food products by 8% to reach 2,680 million euros, exceeding 7,500 million euros in the last three years. As a consequence, in the last 5 years, Lidl has contributed to reducing the Spanish trade balance deficit by 5.9%. In this sense, its impact on the internationalization of the Spanish fruit and vegetable product is especially significant. According to the PwC report, in 2020 it accounted for about 14% of all the country’s fruit and vegetable exports and in the last 6 years it has increased the value of its fruit and vegetable exports by 72%.
Spanish purchases of 5,200 million
As explained by Figueras, in 2020 the chain bought Spanish products worth 5,200 million euros, which is 13% more than in 2019 and, in turn, an increase of more than 58% in the last five years. In addition, it reinforced this commitment with the incorporation of more than one hundred new suppliers in 2020, reaching 850. For his part, the partner responsible for Economics in Strategy at PwC, Jordi Esteve, has detailed the tax contribution made by the company to the coffers Spanish public. The analysis of the consultancy indicates that Lidl paid a total of 413 million euros of taxes in Spain in 2020.
“Lidl’s tax contribution in Spain is approximately equivalent to paying 1.13 million euros per day. Or what is the same, for every €100 of sales, it allocates €9 to the payment of taxes, which is 50% more than other large operators in the distribution sector”, Esteve has detailed among taxes collected (mainly VAT) and those supported fundamentally related to Social Security contributions for their employees, but also to local taxes that directly affect the town halls of the municipalities where they have stores.
The workforce increases by 11%
The report indicates that Lidl is also the supermarket with a national presence with the highest rate of job creation in Spain in 2020. «Our company increased its workforce by around 11% compared to 2019, reaching nearly 17,000 employees, while, in In the last 6 years, we have increased the number of workers by 71%”, Figueras remarked. In his opinion, the chain generates quality jobs and contributes to job stability with an average of indefinite contracts of more than 93% in the workforce since 2016, 8 points above the industry average and 17 points above the national average. With this generation of employment, the effect of Lidl’s activity meant that in 2020, for each job generated directly, 7.2 indirect and induced jobs were created, or what is the same, a generation of more than 139,000 jobs .