Schwarz has ambitious growth plans for Lidl | RetailDetail

Schwarz has ambitious growth plans for Lidl

Schwarz has ambitious growth plans for Lidl

Lidl's parent company, Schwarz Gruppe, wants to reach a 100 billion euro turnover by 2020, which is why it wants to expand and reorganize. That is what CEO Klaus Gehrig said in the German media.

From 79 to 100 billion euro in 2020

German papers Manager Magazin and Lebensmittel Zeitung have published interviews with Klaus Gehrig, remarkable considering Schwarz Gruppe's traditionally closed nature. The group is known for its Lidle discounter stores, but also for its compact hypermarkets under the Kaufland brand.

 

Schwarz currently manages a 79 billion euro turnover worldwide, but it wants to reach 100 billion euro in 2020. Its successful discount formula Lidl will spearhead this ambitious plan at first. The formula is active in 28 European countries, even in smaller European markets like Malta or Latvia.

 

Lidl will also open its very first American stores in 2018, which is a new market with huge growth potential provided it can replicate its success from the United Kingdom.

 

10,000 Lidl stores

Expansion is vital for Schwarz' growth ambitions, but it will also have to manage its current store network and organization. "We want to increase Lidl's strength in the current markets, expand it into new markets and reorganize Kaufland", Gehrig explained the company's three priorities. "The entire Schwarz Gruppe will also adapt its entire corporate culture."

 

Lidl stores smaller than 1,000 sqm will also be transformed into larger stores in the existing markets. Larger and more modern is the motto but Lidl also wishes to invest several billions euro into the modernization of its current store network. Alongside these investments, Schwarz will also increase the number of Lidl stores in every market. It expects to open its 10,000th store this year.

 

Lidl expands, Kaufland reorganizes

Schwarz Gruppe has made no secret of its intentions to bring Lidl to American shores. "We want to come to the American shores step by step. It is a major opportunity for us", Sven Seidel, Lidl's director, said in Manager Magazin. Schwarz will allegedly invest 180 million euro to launch in Virginia and then expand to some 100 stores at first.

 

Schwarz will not expand Kaufland, although it will remain active in its current 7 markets. After the fall of the Berlin Wall in 1989, Schwarz introduced its price-aggressive hypermarket formula in the former DDR and then expanded to 6 countries in Central and Southeast Europe. Mainly the product range of its 640 German Kaufland stores will be downsized and its costs will be brought back to reality. That should help bring profitability up.

 

Schwarz needs to increase efficiency

Kaufland will be reorganized, with an increased focus on the different regions as Schwarz' hypermarket formula experiences a lot of competition from other German supermarket organizations that have a closer connection to their customers because of their localized structure. It is this strategy that Schwarz Gruppe now wants to mimic with Kaufland.

 

The Schwarz Gruppe will also adjust Lidl and Kaufland's strategies to better fit each other. Unnecessary double management positions will be cut to increase efficiency. "We have to organize the company in such a way that we can optimize the synergies", Gehrig told Lebensmittel Zeitung although he did make one exception: the purchase divisions.

Questions or comments? Please feel free to contact the editors


Are Chinese prisoners working for H&M and C&A?

20/02/2018

British former journalist Peter Humphrey has accused C&A and H&M of using forced labour. He claims to have seen how Shanghai prisoners were forced to work for Western chains, something the retailers will now investigate.

Chanel acquires stake in online retailer Farfetch

19/02/2018

French fashion label Chanel obtained a minority stake in British Farfetch. It wants to use the online retailer’s expertise to create more digital innovations for its own customers.

Monoprix wants to acquire web shop Sarenza

19/02/2018

Store chain Monoprix, part of French Groupe Casino, entered negotiations to acquire online shoe seller Sarenza, one of France’s prime online brands.

Zalando expands collaboration with German retailers

16/02/2018

Zalando has further expanded its collaboration with physical retailers in Germany. Shoe stores were already able to ship through Zalando and now clothes stores can too.

Kiabi opens largest Belgian store in Westland Shopping Center

15/02/2018

French clothing chain Kiabi will open its fifth Belgian store in the Westland Shopping Center in Anderlecht. This will become its largest Belgian store to date, spread across 1,800 sqm.

H&M warns for difficult 2018

15/02/2018

Swedish fashion group H&M warns that 2018 could be yet another difficult year for the company. It is working to improve online sales, but store turnover will most likely continue to drop.

Back to top