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Austria: Lidl on a major modernization course

Updated: Aug 18, 2022

Discount Retail Chain Lidl Austria (owned by German Schwarz Gruppe) is getting louder. Since the Swiss-born Alessandro Wolf took over the chairmanship of the Lidl Austria management on December 1, 2019, no stone has been left unturned at the discount store.

In the medianet interview, Wolf talks about the retailer's modernization, range expansion and climate offensive.

Lidl increased sales by 7% to EUR 1.47 billion (US$1.73Bn) last year. How satisfied are you with the results, also in comparison to the competition?

In principle, it would be presumptuous to not be satisfied with anyone who was not allowed to keep it open. In the food retail sector, customer frequency has generally decreased due to the pandemic, customers no longer went to two or more shops. Full-range retailers have benefited more from this than the discount. We could still do well here and are satisfied.

In the previous year, a number of locations were modernized, and the entire branch network is to be converted to the new store concept by 2023. How do the renovated sites differ from those that are still to be modernized?

With the new stores, we are simply offering our customers a better shopping experience. The entire atmosphere is lighter and more customer-friendly, the shelves are clearer and technically up-to-date. Shopping is faster and, above all, much easier. We stay true to our values ​​when it comes to our products and concentrate on freshness, regionality and the best price-performance ratio. We have also created space for the large range expansion. With organic in particular, we still have a lot planned.

As part of this expansion, Lidl has expanded its range by 400 products since January 2020. What were the main areas in which the product range was expanded?

The expansion basically affects almost all product groups. The focus is still clearly on regionality and organic quality from Austria. And we are constantly developing; the best example of this is our Austrian own organic brand 'A good piece of home'. What is new is that it has recently become 100 percent climate neutral and thus sets a benchmark for sustainability. We have also greatly expanded our vegetarian offer and added a total of 15 new vegetarian alternatives to our permanent range.

Lidl wants to be perceived as the 'main shop for regular family shopping'. What steps are necessary to be perceived as an option by even more people?

By listing the new products in the past financial year, we have already taken a big step and already have 2,000 items in our permanent range. The clear focus is on the freshness areas, where we offer up to 150 items in the fruit and vegetable area, for example, or bake over 45 breads a day. We also have big plans for meat and will have over 80 meat and fish items listed in the summer. So we're mainly focusing on the product range here, but at the same time we want shopping with us to be quick and easy. Shopping with children is not always particularly relaxing (laughs). We also have the best price-performance ratio. This is also confirmed by the recent award from the ÖGVS (see page 8).

In December, Lidl was the first large grocery retailer to speak out in favor of one-way deposit, a few weeks later Lidl caused a sensation in the industry with the introduction of a one-way deposit machine. What were the reasons for this?

In order to be able to achieve the common goals of the circular economy package in Austria, the entire collection and recycling system must be further optimized, standardized and simplified. With a one-way deposit, especially with PET, cycles can be closed, the quality of the high-quality raw material preserved and littering minimized. The best example is the 1.5 liter PET bottle of our still Saskia mineral water: The entire body of the bottle is made from 100% recycled PET. We also use approx. 70% less fresh PET for lemonades and iced teas of our own brands 'Saskia' and 'Freeway' than we did a few years ago. It is important that when a one-way deposit arrives, the system is made as simple and efficient as possible.

Lidl's sustainability efforts are bundled in the 'Lidl Climate Offensive', the motto is 'On the way to tomorrow'. What are the key points of the program?

We are constantly working on improvements in all areas of activity. Particular attention will be paid to climate protection in the coming months and years. This also includes our strategy of reducing plastic, promoting the circular economy or avoiding food waste, but also renewable energy. There are currently over 20 photovoltaic systems in operation on the branches and roofs of the logistics centers that produce environmentally friendly, green electricity. The topic of e-mobility is also important to us. We currently have 38 stores with free E-charging stations for our customers and employees. The topic of climate protection will continue to play a major role, we want to present news about our climate offensive in autumn.

In the past few years, the discount retail industry has undergone a major change in image. How does Lidl differentiate itself from its competitors in the discount retail segment?

Discount retail has developed tremendously in recent years, especially when it comes to the topics of product presentation, variety and quality or the fresh offer. With our wide range, we are now a real one-stop shop and are developing into smart discounters. A special feature are, for example, our 'Food Expos' with regularly changing, international country campaigns. Here we can build on the common strengths of the individual Lidl countries within the group and thus offer the best international products to our customers. Our old virtues such as an outstanding price-performance ratio and a consistent approach to freshness have remained. And you can rely on us in the future too. We are always working to get even better. We are open to new things and innovations, but it also has to fit our format. Keyword digitization, our Lidl Plus app is a perfect example here: Our digital benefit app has been available since 2018, which makes shopping even easier and more pleasant for our customers.

Lidl recently opened its 255th store in Austria in Liesing. Will that number keep growing in 2021? And what else is Lidl up to?

Our focus in the next two years is clearly on our existing branch network. The Austrian food market has the highest market concentration in all of Europe. Locations that make economic sense at the end of the day are not that easy to find. But there are still some blank spots, and there is still room for improvement for us. Our goal is to keep growing, but not at any price. That means we will be more selective when looking for a location. Four new branches are currently planned for the 2021 financial year, four more locations will be completely rebuilt, and we will continue to drive qualitative expansion. In addition, our new, ultra-modern logistics center in Großebersdorf will go into full operation as early as May. We are creating up to 250 new jobs and investing more than 150 million euros (US$176Mn) in the region. With the new logistics center, we are laying the foundation for further expansion. It is one of the largest and most efficient logistics centers in the entire Lidl Group and provides additional capacities for delivering to our branches.

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