Lidl Spain increased its sales by 7.8% last year to €3.59 billion, following a major investment programme undertaken by the discounter over the past three years.
Lidl has invested close to €1 billion in expanding its operations in the Mediterranean country since 2015, with €330 million of this spent last year. This represents more than 9% of the company's turnover, according to Europa Press.
Lidl opened 25 new stores last year to give it a total of 550 outlets in the Spanish market.
The retailer created 800 new jobs in Spain last year, and currently employs more than 13,0000 personnel. In the last three years, it has increased its workforce by more than 30%.
According to the most recent market share data for Spain (12 week period to 28 January) from Kantar Worldpanel, Lidl holds 4.4% of the Spanish market, some 120 basis points behind fourth-placed Eroski, and 70 basis points ahead of Auchan, in sixth.
Mercadona continues to lead the grocery market, with 24.1% share, followed by Carrefour (8.6%) and Grupo Did (7.7%).
Price Management
As in other European markets, Lidl's expansion has been underpinned by a major price investment strategy. According to Nielsen data, while average prices in the Spanish grocery sector increased by 2.1% on average, at Lidl, prices fell 0.06%.
In fresh produce, Lidl's pricing position remained unchanged year-on-year in 2017 (0.0%), while across the wider retail sector, prices increased by 2.8%.
According to Lidl, this pricing strategy has saved its customers in the region of €148 million.
Spanish Strategy
Its continued store expansion indicates that Lidl is still eager to maintain a 'race for space' in Spain, while in other markets, the discounter appears to be investing more in boosting profitability.
A recent report from Barclays European Food Retail Equity Research noted that the discounter's international sales rose by 6.9% to €41.53 billion in FY 2016/17, and by 9.5% at constant currency levels.
This is still an impressive figure by international retail standards, however it is down on the successive double-digit increases of prior years. This has led some commentators to believe that Lidl may now be focusing on improving the profitability of its existing estate, rather than a rapid store count increase, in several markets.
Lidl has had a presence in Spain since 1994, when the discounter opened its first store in Lleda.
Recently, the former head of Lidl Spain, Michael Aranda, was appointed head of Lidl's US operations, as part of a management shakeup there.
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine.
