George Osborne, right
hailed Lidl's store opening plans, duriing a visit to the supermarket
chain's store in Chessington, Surrey with UK managing director Ronny
Gottschlich.
Photograph: Rex
The threat to the big four supermarkets from discount chains stepped up a notch on Fridayas Germany's Lidl unveiled plans for a £220m expansion in the UK.
The
company will open 20 more stores by the end of this year, taking its
total to 620. It said the move would create a total of 2,500 jobs in the
stores, at its headquarters in Wimbledon, south London, and at a
distribution centre in Northfleet in the Thames estuary.
Theannouncement came after the company spent £170m in the UK in 2013, opening 12 stores and creating 3,500 jobs.
Ronny
Gottschlich, Lidl UK's managing director, said: "This latest phase in
our growth is a testament to the continuing success of Lidl in the UK."
The
chancellor, George Osborne – who joined Gottschlich at the announcement
– told the trade journal Retail Week that he shopped at the northern
supermarket Booths but added: "It's great news that Lidl is investing in
thousands of new jobs across the UK – each job means security and a
better future for another family and the country as a whole."
The
privately owned firm reported sales of £3.3bn last year with a 20%
increase in the last 12 months helping Lidl grab a 3.6% share of the UK
grocery market.
Together with even faster growing rival discounter Aldi, Lidl controls about 8% of the UK grocery market while the big four supermarkets – Tesco, Sainsbury's, Morrisons and Asda – have lost out.
Changing
shopping habits have caused upheaval in the grocery market with
Morrisons slashing its profits to deliver £1bn of price cuts and product
improvements over three years while Sainsbury's has teamed up with Danish retailer Dansk Supermarked to bring the Netto discount chain back to the UK.
Gottschlich said he was "surprised" that the two companies had teamed up.
But
Sainsbury's said it was compelled to take action as discounters are
expected to see their share of the grocery market double to about 15% in
the next five years.
Amid widespread economic difficulties across Europe, Lidl's owner Schwarz Group is set to become western Europe's biggest grocery retailer by 2018 .
The
company, which is controlled by a German multibillionaire and owns the
Kaufland hypermarket chain, is forecast to overtake French group
Carrefour and Tesco by generating sales of €80bn (£65bn) by 2018.
Lidl has said it plans to eventually operate 1,500 stores across the UK.
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