The British arm of German discount supermarket Lidl has increased its commitment to UK food suppliers, saying it would spend £2 billion (€2.3 billion) more with them by 2025 than it previously projected.
Lidl GB and fellow German-owned discounter Aldi are Britain's fastest growing grocers, benefiting from new store openings and their growing appeal to price-sensitive consumers reeling from a cost-of-living crisis.
Lidl GB had in 2019 committed to spend £15 billion (€17.1 billion) with British suppliers from 2020 to 2025, but now expects to spend £17 billion (€19.3 billion), reflecting its rapid growth.
It plans to spend £4 billion (€4.6 billion) with British suppliers this year.
Lidl GB, which has a UK grocery market share of 7.2%, said it sources two-thirds of its core products from the country, working with more than 650 suppliers.
The company said almost £500 million worth of exports from its British suppliers in 2022 went to other Lidl markets, including over £50 million of British cheese.
The ties between supermarkets and suppliers are in the spotlight after John Allan, chairman of Britain's biggest grocer Tesco, said some companies may be using inflation as an excuse to raise prices more than necessary – comments that baffled the head of the country's farmers' union and food industry groups.
Ryan McDonnell, CEO at Lidl GB, said, “The farmers and producers that supply us, some of which have been with us for decades, are paramount to the success of our business.
“We see them as partners in our mission to provide households with high quality affordable produce, and for many, working with Lidl GB and being part of our growth has opened opportunities for their own expansion, both here in the UK and across the globe.”
Earlier this month, Lidl GB reported a 24.5% jump in December sales from a year earlier.
Currently trading from 950 stores, it plans to have 1,100 outlets by 2025.
Lidl is part of the Schwarz retail group, which trades in 31 countries.
News by Reuters, additional reporting by ESM – your source for the latest retail news. Click subscribe to sign up to ESM: European Supermarket Magazine.