Sunday 23 October 2016

Lidl is facing collapse


Sales has been declined at Lidl's old shops.

Lidl's rampant growth in the UK is stalling as sales have slumped by around 5pc at the discounters' shops that have been open for more than a year, according to a fresh analysis of industry figures.

The slowing sales raise fresh speculation about the reasons for the abrupt departure Lidl's former chief executive, Ronny Gottschlich. Last month Mr Gottschlich unexpectedly resigned after 16 years with the German retail chain and was replaced by the head of the supermarket's Austrian business with no explanation given.

Earlier this week, data by Kantar Worldpanel revealed that Lidl and its German discounter peer Aldi were continuing to grow market share by adding around 60 to 70 stores a year.

However, analysts and retail sources have said that Lidl's market share of 4.6pc, compared to 4.3pc the year before, and a total sales rise of 8.4pc, mask the true picture of like-for-like sales - an industry benchmark that measures sales at stores that have been open for more than a year.

Clive Black, analyst at Shore Capital, said that the Kantar figures and Lidl's shop opening rate "would imply a collapse of same-store trade at Lidl of maybe minus 4pc to 6pc".

"Perhaps the data is rogue but it would correspond quite remarkably with significant and surprise management change at the organisation."

Aldi and Lidl now control 10.8pc of the UK's grocery market and have plans to open five times as many new stores as all their "Big Four” rivals combined.

Analysts at Bernstein have consistently argued that sales at the discounter's older stores have fallen into negative territory and the German-owned grocer is flattering its numbers with its rampant shop-opening programme.

In June Aldi's chief executive Matthew Barnes insisted that like-for-like sales were still positive but said that same-store sales were not an "accurate measure” for the company, which is primarily focused on boosting UK shop numbers to 1,000 by 2022.



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