Schwarz Group (Lidl) grows with restraint

Schwarz Gruppe, the parent company of Lidl and Kaufland, grew last year on just about every front. However, growth is slowing down and online faces challenges.

Fewer shop openings

Last financial year, Schwarz Gruppe managed to increase turnover by 8.5 % to 167.2 billion euros. The retailer lagged somewhat behind food inflation, which exceeded 12 % in Europe last year, as Lidl and Kaufland invested in lower prices. Nevertheless, Schwarz Gruppe remains by far the largest retailer in Europe, well ahead of Rewe Group, which accounts for consolidated sales of 92.3 billion euros.

The group achieved this limited sales growth without additional staff: the number of employees in the group remained unchanged at 575,000, despite the opening of 200 additional stores. That in itself is a marked slowdown: in recent years the group opened an average of 400 branches. In total, the company now has 13,900 shops, 12,200 of which under the Lidl banner.

Downturn for e-commerce

Lidl increased its sales by 9.4 % to 125.5 billion euros, growing in all of its 31 markets. However, here too expansion was a bit slower: no new countries were added last financial year. Preparations are currently under way for a launch in Bosnia-Herzegovina and North Macedonia. Hypermarket chain Kaufland realised an increase of 7.8 % to 34.2 billion euros (of which 21 billion in its German home market).

The group’s manufacturing companies – which include plants for coffee, pasta and paper products – saw a 26 % increase in turnover. Schwarz commissioned its first foreign production unit last year: a beverage plant in Derby (United Kingdom).

Remarkably, the group’s online sales fell 9.4 % to 1.7 billion euros. That drop reflects the general decline in German e-commerce after its peak during the pandemic, the company says. Recycling subsidiary Prezero also saw sales fall, due to falling prices for recyclable materials.