The British arm of German discount supermarket Lidl posted a 19% jump in revenues as its low prices attracted higher numbers of shoppers, but it swung to a loss due to higher costs from inflation and investments in new stores.
Their appeal has grown during Britain's cost-of-living crisis as shoppers have sought savings and, unlike their traditional rivals like Tesco and Sainsbury's, they continue to open new stores.
For the 12 months to 28 February 2023, Lidl GB said it welcomed an additional 1.5 million customers, driving revenues up to £9.3 billion, but the company, part of Germany's Schwarz retail group, posted a pre-tax loss of £76 million ($94.97 million).
Ryan McDonnell, Lidl GB CEO said in a statement, “The entire retail market has seen inflation, and we are no exception. However, for us, what is important is that our price gap to the traditional supermarkets is as strong as it has ever been.
“We’ve invested in keeping our prices low for customers in what has been a very challenging year for most and, with many more customers flooding through our doors each day, our ambition is to ensure that every single household has access to high quality, affordable food at their local Lidl store.”
Lidl GB, Britain's sixth largest supermarket with a market share of 7.6%, has in the past said it is relaxed about its relatively low profitability because of its long-term outlook.
It said in a statement it had the full support of its parent company, adding it has invested £533 million in Britain in the year and opened over 50 new stores.
The discounters' performance has forced the traditional major players to compete more aggressively and they have accepted a profit hit to keep prices down.
Last year, the business, which sources its entire core range of fresh meat, eggs, milk, butter and cream from British suppliers, has spent over £4 billion with British companies, reaffirming its commitment to buy British wherever possible.
News by Reuters, additional reporting by ESM.