When Lidl arrived in the UK 20 years ago, it took a vow of silence that made the average monk look chatty. Even just a few years ago, calls asking for the name of its mysterious MD were met with a crisp refusal, followed by the dial tone.
However, in its first-ever interview last week, Lidl opened up to The Grocer. And it made up for lost time. MD Ronny Gottschlich spoke freely on all manner of things, from his socialist upbringing in East Germany and his love of Britain, to the business side of Lidl, offering up facts and figures on ranging, store sizes, brands, employees and prices, as well as his dream to grow the Lidl portfolio in the UK, quoting a “vision” of a whopping 1,500 stores.
It was the last point that generated headlines at the weekend, following a subsequent interview in which Gottschlich repeated his plans. Yet rather than an avalanche of new Lidl stores swamping the UK over the next few years, the truth is more prosaic.
“I would like to see it double to 1,200 stores,” Gottschlich told The Grocer. “1,200-1,500 stores we can see working. It is part of our ambition, our vision.”
When might this happen? “Tomorrow, if not as soon as possible,” he laughed, but when pushed harder, Gottschlich was more pragmatic, conceding that such ambitious growth “will take some time, of course. Sometimes we speed up, sometimes we slow down”. As for a target date, he declined, saying: “I don’t want to put my name on a year it can be achieved by.”
The fact is that, far from steaming forward, Gottschlich has recently slowed down Lidl’s growth in order to “cleanse” the estate. In 2013 he shut eight stores and opened 12.
“We are coming out of a phase where we said let’s settle down, let’s see our portfolio, let’s see where we should cleanse, and accept we may have a slower pace of growing,” Gottschlich explained. He also said his current focus was on quality, not quantity, when it comes to securing sites for new stores.
“I want to make sure we are growing quality in terms of portfolio,” he said. “Choosing the right location so we don’t need to look back three years later and realise it isn’t right.” This is also a task fast becoming “harder than it was” because Lidl’s rivals, including the major multiples, are after the same sites.
The upshot is that although Lidl is, without question, moving forward, and investing heavily, it’s at a deliberate, steady, pace. And the current focus remains on refurbishment, rather than rapid expansion. Next year Lidl plans to gently accelerate from 12 new stores to 15-20, while refurbishing all 600 existing stores, fitting out another 150 with bakeries, and building warehouses.
And although Gottschlich says he would eventually like to return to a “pre-recession pace” of building 25-30 new stores a year, even if Lidl manages to open 30 a year starting now, more than doubling its current speed of expansion, it will be 2045 before it hits 1,500.
In short, although there is no doubting the seriousness of Gottschlich’s ambitions, it’s clear the rampant expansion talk is less about short-term action and more about Lidl’s long-term dream. So it’s not something that its rivals need to start having nightmares about.
Not yet, anyway.
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