Lidl makes homes and schools part of its development plan

07 Aug 2018
Lidl's goal of opening 50 new supermarkets in the United Kingdom in a year requires permission from local authorities. These authorities will grant permission if the establishment of the new stores also involves the development of community facilities.

With a turnover of 96 billion dollars, 200,000 employees and a network of 10,000 stores worldwide, Lidl is the undisputed leader of discount supermarkets. According to the National Retail Federation, it is the biggest retailer in Europe and the fourth largest worldwide (behind the American chains Walmart, Costco and Kroger respectively).

Lidl recently announced its expansion plan for the United Kingdom, which involves the construction of over three thousand homes and a primary school. The proposal should not come as any real surprise, but it is an important indicator of the widespread market shift towards a radical rethink of the impact on local areas.

Two of Lidl's homegrown competitors, Tesco and Sainsbury's, have also been following the same policy for some time. The former has built hundreds of apartments around its shops in the London suburbs of Woolwich and Streatham, while the latter contributed to a new construction project near Vauxhall and recently obtained permission for 700 homes in Redbridge.

In the United States, as shopping centres face an increasingly pronounced decline, various malls are reconfiguring their facilities to provide services to residents who shop there. First and foremost, healthcare and various support services have had an inevitable impact on the property market and on construction.

A convergence of interests with local authorities

In this case, Lidl's goal of opening 50 new supermarkets in a year would require permission from local authorities. According to The Guardian, these authorities will grant permission if the establishment of the new stores also involves the development of community facilities.

Lidl's strategic drive, which lacks significant precedents (only one dating back to 2008) will also include offices, hotels and student accommodation in the future. These investments, however, are not simply a means by which to open new supermarkets. Selling and renting buildings provides a significant revenue stream. Lidl's initiative will aim to create affordable housing in line with the concept of convenience that characterises its retail approach.

Naturally, all the industry's main players are keeping a very close eye on the policies of the company from Baden-Württemberg. Lidl and Aldi are seen by English retailers as their most dangerous competitors (and likewise in the United States). In the last three months of 2017, for example, both companies saw their turnover rise by almost 17 percentage points compared to the same period of the previous year. The threat posed by these German competitors was one of the main reasons for the recent merger between Sainsbury's and Asdato create a new entity that will potentially hold 32% of the UK market share.