Denmark: Lidl attacks the Danish market and re-models all stores
Discount Retail Chain Lidl Denmark (owned by German Schwarz Gruppe) launches an offensive in Denmark with a million investment in re-modelling all the current 133 stores. At the same time, the supply of products with a greater focus on Danish food is increasing.
The upgrade from Lidl Denmark is taking place, at the same time as the chain, in line with the competitors in the grocery market, is reporting record sales through 2020. The corona crisis with closures, more Danes in home offices and at times forcibly closed restaurants has increased sales of groceries.
“We will not close the financial year until February, but it has been a good year for us with sales growth and gained market share. In the coming period, we will increase the investments in the stores, which will be designed according to a completely new and modern concept," says CEO Dirk Fust, Lidl Denmark. He continues: “We are and will be a discount chain. But in the future, we want to make things even smarter. Therefore, we change the concept and expand the range so that we become even more Danish. At the same time, we can draw on products from our international colleagues at Lidl. "
The Danish discount market
The Danish chain is part of the German Lidl group with approx. 11,000 stores in 34 countries. In the Danish market, Lidl is the smallest discount chain together with German discounter Aldi measured in number of stores. Netto owned by Salling Group, Fakta owned by Coop Denmark and Rema 1000 Denmark are the big ones in this country.
For some years, Coop has had challenges with Fakta and therefore launched a new chain of low-cost supermarkets under the name Coop 365 a few months ago. Both Netto and Rema 1000 also have ambitions to expand. At the same time, the Netto chain is in the process of modernizing the now 515 Danish stores. Michael Løve, head of Netto International in Salling Group, told Finans a few months ago that the chain has "a good grasp of our new concept and sees potential in new stores, so we will reach 600 within a number of years". He also stated: "Corona has been growing the market for a while. But there will soon be a day when we have to fight from store to store again. We are ready for that. "
In addition to the new concept, Lidl Denmark will grow with new stores. The chain has ambitions to expand annually with 10 new stores and within an undefined number of years reach the 200. At the same time, the new store concept, which has initially been rolled out in three places in the country, must be built into all the existing stores. According to Dirk Fust, it will be completed during 2022. Lidl Denmark has an annual investment budget of DKK 1 billion (US$160mio). In the recent period, in addition to new stores, investments have been made in a new logistics center in Køge, while construction is underway on a new headquarters for the chain in Aarhus. Dirk Fust will not specify how much is spent on rebuilding the stores to the new concept. However, he states that this is a large million investment.
The instore concept includes changed decor, new colors and materials. The goal is for the stores to have a more Scandinavian look than before. At the same time, the range will be expanded with 200 new products over the coming year, so that the number will reach 2,820 in the fixed range. Many of these must be Danish. “We want to capture even more market share. A changed store concept and more goods are important elements in that strategy. We focus on consumers and experience that they to a large extent want Danish goods. In recent years, we have had rapid growth in sales of fresh goods i.a. ecology," says Dirk Fust.