The sales of non-food items in Lidl has dropped below 10% in almost all markets, according to a report in Lebensmittel Zeitung.
The German discounter had set a target of achieving 15% sales in the category, which has now been dampened by decline in demand and logistical hurdles.
As a result, Lidl has decided to cut non-food orders that were recently placed for the next financial year, online publication chip.de reported based on information from ‘insiders’.
Sales have particularly declined for products over €20 as inflation weighed on shoppers.
The non-food business is the second most profitable product range for the retailer, but high cost of storage is adding to the burden on the company’s balance sheet, the report noted.
In December of last year, Lidl Denmark announced plans to launch an online business from the beginning of 2023, which will offer a range of non-food items.
Elsewhere, Carrefour Polska has expanded its ‘Outlet’ concept earlier this year, which offers non-food items at discounted prices, to around 90 stores across the country.
Last year, the company introduced Outlet zones in 34 stores, which received a positive response from shoppers.
Recent data unveiled that Euro zone retail sales plunged in June and factory gate prices continued to rise, with the volume of retail sales in the 19 countries sharing the euro, already adjusted for inflation, falling 1.2% month-on-month in June for a 3.7% year-on-year decline.