Lidl and Kaufland parent Schwarz Group has reported a 'successful' financial year 2023 with an 8.5% increase in revenue to €167.2 billion.
The company attributed this growth to higher prices due to inflation, improved processes and further digitalisation.
Improved processes and cost management helped Schwarz Group to partially absorb higher purchase prices, particularly for merchandise, raw materials, energy and transport and interest rates.
By focusing on pricing and design of the product range, Lidl and Kaufland continued to offer attractive prices in an inflationary environment.
"This stable fiscal year 2023 reflects first and foremost our operational excellence across all fields of business and the impressive commitment of our employees," said Gerd Chrzanowski, general partner at Schwarz Group.
"We solidified our position in difficult economic times and continued on our growth trajectory. That was achieved because we are a unique ecosystem that covers the entire value chain," Chrzanowski added.
Divisional Performance
Discount chain Lidl generated revenue of €125.5 billion at its stores, up 9.4% compared to fiscal 2022, while Kaufland reported a 7.8% increase to €34.2 billion.
The company's online channel generated revenue worth €1.7 billion, marking a 9.4% decline on the previous financial year and at par with revenue for the year 2021.
This decline was in line with market developments for online shops in Germany following a phase of very high revenue fuelled by the pandemic, Schwarz Group noted.
The company's environmental division, PreZero saw a 5.9% decline in revenue, to €3.7 billion, due to falling prices of recyclable materials in some markets.
However, the division witnessed year-on-year growth in the number of municipalities turning to the business for waste disposal services.
Production And IT Divisions
The production companies of Schwarz Group supplied goods worth approximately €4.2 billion during the financial year, largely to Lidl and Kaufland, resulting in a revenue increase of 26% year on year.
The expansion of Schwarz Produktion to include the coffee, pasta and paper product groups contributed to this growth, the company added.
Elsewhere, the company commenced operations in its beverage plant in Derby in the United Kingdom, marking Schwarz Produktion's first location outside of its home market.
Schwarz Group's IT division, Schwarz Digits was founded in 2023 to address the strategic importance of digital infrastructure, cybersecurity and artificial intelligence (AI).
The division, which offers products and services to companies of Schwarz Group as well as external clients, generated revenue of €1.9 billion during the financial year.
Schwarz Group also acquired an equity interest in German AI developer Aleph Alpha and invested in Wire and its communications solution.
These investments, focusing on modernising and expanding stores, new warehouse locations and securing supply chains, amounted to approximately €8 billion, the company added.
