German discount supermarket Lidl’s UK unit on Thursday reported a sharp full-year loss after investing in staff and logistics.
The company posted pre-tax losses of £25.2m for the year to February 29, 2020, just before the coronavirus pandemic struck. This compared with profits of £19m a year earlier.
Lidl cautioned the result was not a like-for-like comparison after an administrative reorganisation last March which saw previously separate divisions of Lidl UK combined into one business.
The UK business invested £654m adding 51 new stores and a new distribution centre in Scotland. Revenue hit £6.9bn as it attracted a record number of shoppers.
It also increased its UK workforce by 8% to 23,249 as it hired nearly 1,800 employees. The group has continued its hiring spree to boost operations in the face of surging demand during the coronavirus crisis, taking on another 8,000 staff.
Lidl recently posted a record 17.9% surge in total Christmas sales over the four weeks to December 27.
The group, which has 6% of the UK grocery market, has committed to investing £1.3bn over the next two years, with a target of 1,000 stores in Britain by the end of 2023.
“We are confident in our strategy and see huge potential in the market long-term,” said chief executive Christian Härtnagel.
Lidl now has more than 800 stores and 13 distribution centres across the UK and is on track to open a new £70m headquarters in Tolworth, Surrey, by the end of the year.
“We will continue to focus on providing customers up and down the country with this, as we grow our store estate, logistics and operations,” Härtnagel said.
“We are confident in our strategy and see huge potential in the market long-term and will continue to hire more colleagues, invest in British suppliers, open more stores and become an integral part of more communities.”
The group, part of Europe’s largest retailer Schwarz Group, said in November that it would increase staff entry-level wages from March to £9.50 an hour outside the M25 motorway that rings Greater London and £10.85 within.
