Discount Retail Chain Lidl Poland, the second strongest grocer in Poland, now wants to claim price leadership for itself in order not to lose touch with industry leader Biedronka. Both in Germany and in neighboring Poland, food prices have risen sharply in recent months.
Inflation in Poland decreased year-on-year in July this year and now stands at 10.8%, down from 2022.11% in June 5. Since the beginning of 2023, the prices of consumer products and services have risen by 5.5%. Here, too, people are increasingly reaching for and buying cheap products, such as private labels or private labels.
The industry leader in Poland is Biedronka with its owner Jeronimo Martins. Biedronka is the largest retail chain with (at the end of the second quarter of 2022) 3,283 stores in over 1,100 cities, which has been present on the Polish market for 27 years. In 2021, Biedronka worked with over 1,000 Polish suppliers, 92% of which accounted for sales. Products in the network's offer. Jeronimo Martins Polska SA employs almost 80,000 people. The value of Jeronimo Martins Group's investments in Poland since 1995 is over PLN 14 billion (Polish zlotys, about EUR 30 billion).
Lidl is polishing up its price image
In Poland, the food discounter already had 2021 stores in 805. In 2022, the number of Lidl outlets even rose to 840. Even though Biedronka is still a long way ahead of Lidl, the German discounter now wants to attack more strongly. According to some surveys and price surveys by the market research agency ASM Sales Force, Lidl leads in prices and is ahead of Biedronka in the cheapest shopping cart. This is an important step for Lidl, as Biedronka had pointed out its price leadership in a large-scale advertising campaign just a few weeks ago.
The competition for places 1 and 2 in Poland between Lidl and Biedronka has been going on for several years. Nevertheless, the gap between the Schwarz subsidiary and the Polish provider is still very high. According to the latest business data from 2021, Biedronka was able to record a turnover of approx. 15 billion euros, while Lidl recorded almost 6 billion euros. Last year, 2022, sales of the number one company grew by as much as 24.6 percent and things are also looking very positive for the current year. At the current distance, it will be difficult for LIDL to get even closer to Biedronka, as Lidl's expansion with new stores has also stalled somewhat. Only 20 new stores were opened by September, in contrast to the then plan of 50 new openings in Poland per year.
Poland is an important market for Lidl
For Lidl, Poland remains and is an important hub for the market in Central and Eastern Europe. After all, profit before taxes in the last financial year 2021/ 2022 (fiscal year always until February 28) amounted to approx. 328 million euros, which accounted for a very good share of profits in the region. In comparison, Biedronka was able to achieve a pre-tax profit of approximately 778 million euros, but with significantly higher sales. Now, through more targeted and strong advertising campaigns, they are trying to show that Lidl offers the best prices in Poland. Further attempts to successfully catch up with the industry leader remain to be seen, but Lidl has the necessary power!\
Source: Supermarket Inside
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