Despite inflation and declining profitability, discounter Lidl has noted that it remains optimistic about the Spanish market.
The German-owned retailer plans to open 30 new stores in Spain in 2024, taking its store count to more than 700. Its long-term goal is to reach 1,000 stores in Spain, according to corporate director Ferran Figueras.
Speaking during an event in Madrid, Figueras added that Lidl España currently has 12 logistics facilities and plans to open four new warehouses, some of which are already under construction.
Total investment in 2023 is expected to reach €250 million to €300 million. So far, Lidl has invested €2.5 billion into its expansion in the Spanish market.
The escalation of prices has impacted Lidl’s performance in Spain, it added.
The discounter recorded a net profit of €193 million in its last fiscal year (closed last February), similar to the previous year (€190 million), according to Figueras.
Sales grew by 18% in the same period, up to €6.08 billion, partly due to the effect of inflation, but also due to the opening of 20 stores. However, an increase in costs has translated into a reduction in margins of 15%.
For the current year, which will close in February 2024, the forecast is to end with sales growth slightly below double digits. As consumption has begun to improve, with consumers opting for higher-value products, Lidl sees reason for optimism in Spain.
Figueras added that the discounter recorded exports of €3.5 billion in Spanish agricultural and food products, which were distributed to the discounter’s 30 countries of operation.
He highlighted the significant impact that this has had on the Spanish economy, contributing €8.19 billion to GDP and creating over 172,000 jobs.