LIDL’S price war with its big supermarket rivals has seen it suffer heavy losses — but it’s preparing to spend even more to win over shoppers.
The discount supermarket has attracted 1.4million more customers over the past year, as the cost-of-living crisis has prompted families to save cash on their groceries.
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The chain, which recently recruited Hollywood strongman Arnold Schwarzenegger to promote its range of cheap power tools, has 960 shops, 14 distribution centres and 31,000 employees in the UK.
Its sales jumped by 18.8 per cent to £9.3billion in the year to the end of February.
But the cost of spending £100million more on keeping food cheap as inflation soared dragged the retailer to a £75.9million loss, down from a £41.1million profit the previous year.
Boss Ryan McDonnell said: “We’ve always had a clear commitment to offer the best value to our customers and that is a promise we will always keep, even in uncertain economic times.”
Industry figures from Which? have previously found inflation levels have been higher at discount stores compared with major supermarkets — but prices are still much lower than mainstream rivals.
Experts say German firm Lidl has an advantage over other supermarkets because it is supported by its rich long-term owner, the Schwarz Group, which is willing to play a long-game, rather than quick profits for dividends and quarterly performances.
Mr McDonnell said that after Lidl’s market share had increased to 7.1 per cent it had “no ceiling on its ambition”.
He said: “We want to gain as much market share as possible. We think there are hundreds more opportunities to open stores in the UK. We want to get all the way to the top.”
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The CEO also gave the clearest sign that while in-person store openings were a priority, he was not shutting the door on venturing into online retailing.
Lidl, which is set to ramp up spending on marketing ahead of Christmas, does not currently sell online, or have a partnership with delivery firms such as Deliveroo or Uber.
But Mr McDonnell said it was still “interested in e-commerce”.
He concluded: “It will be a question on when it is the right time for the business and when we believe we can make money from it. We want to be an omnichannel retailer.”
John Lewis bonuses blow
JOHN Lewis Partnership staff are unlikely to get a bonus this year — after the retailer warned its turnaround plan would take two years longer than expected.
The business tried to put a positive spin on a narrowing of losses from £66.8million to £57.3million, after generating more cash and cutting costs.
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However it said its ambition of making £400million profits by 2026 would now have to be pushed back to 2028 — blaming a “hurricane” of additional expenses.
It comes six months after the business said it would treble its “Partnership Plan” goal to make £900million of efficiency-savings — with John Lewis now saying it wants to make “sustainable” profits before rewarding staff.
For years, workers enjoyed generous bonuses as part of its employee-ownership model.
But they are now unlikely to receive an award next spring.
Chairman Dame Sharon White, also said there might be a “delay” to her aim to generate 40 per cent of profits outside retail by 2030.
She had voiced plans to push John Lewis into garden centres, finance and housing, but housing plans have stalled in the face of local opposition.
The group’s department store sales also fell by 2 per cent to £2.1billion, as shoppers cut back on furnishings.
Pump it up
OCTOPUS Energy has launched a range of “Cosy” heat pumps which, at £3,000 to install on top of grants of £5,000, will be cheaper than others on the market, which typically cost between £17,000 and £25,000.
Anger at bonking BP probe
CAMPAIGNERS have reacted furiously to news that BP’s board was wasting time and resources fretting about their boss’s love life last year during the height of the energy crisis.
At a time when Brits were worried about whether they could afford to switch on the heating, it has emerged that BP’s board was conducting an internal investigation into boss Bernard Looney’s romantic dalliances with colleagues.
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BP said late on Tuesday night that its board had conducted an investigation last May into Mr Looney’s personal relationships.
At the same time, oil and gas prices had shot to a record high on the back of Russia’s invasion of Ukraine.
BP ended up making a profit bonanza, fuelling a £10million bumper payday for Mr Looney.
“Millions of us were suffering from inflated energy prices, whilst BP was focused on making billions of pounds in windfall profits and the love life of their boss,” Jonathan Bean, spokesman for Fuel Poverty Action, said.
Mr Looney was forced out of BP this week after a whistleblower gave evidence that he had not been fully honest about the prolific nature of his past romantic relationships.
He had been at the helm for less than four years but had more than two decades with the business.
Shares tumbled by £2billion in the wake of his departure.
BP is waiting for the outcome of a new investigation into his hook-ups by lawyers at Freshfields before deciding whether it can recover the bonus he got last year.
Mr Looney has admitted he was not transparent with the board.
Shot in the arm
SHARES in British chip-maker Arm jumped 10 per cent in its New York stock market listing yesterday, valuing the company at $57.5billion — or £46.6billion.
The Nasdaq flotation of Arm, which makes chips for many smartphones, has beaten optimistic expectations.
Arm’s owner Softbank sold 10 per cent of the company at $51-a-share but they immediately shot up to $56.10.
It is the biggest company listing this year and comes after it snubbed the London Stock Exchange as a venue, despite overtures from Prime Minister Rishi Sunak.
THG share sink
THE founder of Myprotein has broken his silence to launch an attack on THG’s “disappointing” results, as shares tumbled by a fifth.
Oliver Cookson, who sold MyProtein to The Hut Group in 2010 and still has a 1.3 per cent stake in THG, said the company was just a “trading shell” for his protein powder.
Shares in THG sank by 21.6 per cent yesterday after it reported a £133million loss for the past six months and said it expected sales to drop by as much as 5 per cent.
“Shareholders must be once again disappointed by these results,” Mr Cookson said.
