M. Brandenburger (Lidl): Greek suppliers cover 60% of our turnover

Martin Brandenburger is the head of Lidl Hellas. The German multinational group has been active in the Greek market for the last 26 years and has a strong presence, but he is extremely sparing in his statements and communication behaviour.

The Swiss manager of the German multinational is speaking to BD for the first time since the war in Ukraine and the peculiar energy crisis has swept the European economy, causing, among other things, high inflation. He is satisfied "that we have achieved our goals. And everyone knows that our goals are ambitious. We remain determined and effective". This is the answer he gave to whether Lidl Hellas is in second or third place in the market.

• Mr Brandenburger, 2022 was generally a very difficult year for the European economy and of course for the Greek economy. In the retail sector, the decline in disposable consumer income was clearly reflected. What did Lidl Hellas achieve in this environment? Apart from the increase in sales, which is mainly due to inflation, how did the sales volume develop?

There is no doubt that the past year was characterised by unexpected events that affected the psychology of the average consumer in one way or another. And they certainly had an impact on the local economy. I will focus more on the cost of energy and the multiplier effect it has had on the production chain. Nevertheless, the positive performance of Lidl Hellas is largely due to the specific characteristics of the brand. We are discount but with the philosophy and capabilities of a large, multinational company that invests in accessible quality. We remain a "democratic" brand, enabling everyone to enjoy quality products at absolutely affordable prices, the best on the market. We serve our customers by offering the best value for money. Even in this difficult period, we are at least 10% cheaper than our competitors, based on internal research where we compared over 200 basic necessities. Our sales reflect this very fact. We remain consistently consistent with our commercial promise over time and thus steadily grow our customer base.

• This year has the average shopping basket decreased or increased? And by how much?

We are satisfied because we have seen a positive consumer response to our modern and steadily evolving business model. We upgraded the shopping experience within our stores and managed to expand the shopping basket. We are meeting the daily needs of the entire family in the best possible way, as is also evident from the analysis of the "Household Basket" by the Ministry of Development and Investment. The Greek consumer recognises our efforts and reciprocates with their trust.

• What was the level of investment during 2022? If and how much do you intend to invest in the next three years and in which regions?

Our total investment to date exceeds EUR 1.4 billion since 1999. We are implementing our investment plans without deviation. We manage to enlarge our market footprint every time organically and not only through mergers and acquisitions, a practice followed by our competitors. As we announced last year, we continue to implement - and in 2023 - a EUR 100 million programme in our store and warehouse network. We modernized 3 stores in Glyfada, Syros and Kilkis, we rebuilt 3 stores in Ioannina, Sparta and Rafina and opened 2 new locations, one in Limenas Thassos and one in N. Kosmos. We aim to invest EUR 20 million in digitisation through the use of Electronic Shelf Labelling (ESL). We want to offer reliable and timely information on products and prices, simple procedures for our employees and of course contribute to environmental protection by saving 15 tons of paper over five years.

• What is the relationship with your suppliers? With how many of them and in which categories do you support their export efforts? What is the value of exports carried out through Lidl's international network?

We work with 400 Greek product suppliers. It is worth emphasizing that 60% of our turnover comes from their products. Our cooperation with them is not only beneficial but also business sound. We believe in sustainable philosophy and apply sustainable trade practices. We support and they support us and together we strengthen the foundations for market and economic growth. Note that we remain, the most consistent and reliable partner for our suppliers, with an average of 41 days of repayment, when the industry average is 117 days. We promote and enhance their prospects not only in the Greek market but also in 30 countries in which Lidl operates, including the USA. The total value of this promotion exceeds EUR 180 million.

• Did the "household basket" which you also - obligatorily - apply have any effect on the sales of the products involved? Do you estimate that it has the results that the Ministry of Development and Investment claims?

The philosophy and commitment to provide quality products at the most affordable prices in the market is dominant in the DNA of our business model. We participate in the "household basket", providing additional support to our most vulnerable citizens. We will continue to do this by offering the lowest possible prices on all our codes and not just on the products in the weekly basket. We appreciate the direction and the initiative of the Ministry of Development with the "household basket" as positive, but for us this is only a small sample of the thousands of products we have in our range at low prices. Our intention is to remain the most competitive in the market every week.

• How do you think the retail sector may evolve in 2023? Do you think it's possible that next year could see the same wave of price increases that 2022 saw?

We are closely following the evolution of market sizes and of course the international assessments of the economic development in Greece and the world. At the moment it is difficult to speak with concrete data, since 2023 will probably be another unpredictable and "volatile" year. Sales volumes will shrink as a result of a reduction in consumers' purchasing power due to inflation and rising energy prices. 

• I know that you are not obliged as a company to publish balance sheets, but based on your sales are you in second or third place in the market?

We are satisfied that we have achieved our targets. And everyone knows that our targets are ambitious. We remain determined and efficient. As a company we always look ahead, claiming "to be first" everywhere. Our customers know why they come to us for their everyday purchases, and that is none other than the fact that we are consistent in our commitment to always provide the best quality at the best prices. In addition, they appreciate our social commitment and investment. In total, we have provided more than 3.5 million euros for the development of social actions.

• How many employees do you employ and how many do you plan to hire based on your investment programme over the next three years? 

We currently employ more than 6,700 people and it is important that we have created about 300 new jobs in a difficult time. Lidl Hellas, especially in the last 10 years, has shown in practice that it is a frame of reference for business stability, feeding back the growth perspective, with opportunities and prospects. We are proud that with the “Lidl UP: Learn and Work” programme we offer young people specialised training and retail executive experience, receiving remuneration from the very first month. We have created this important initiative in collaboration with the public I.E.K. Glyfada and the Hellenic-German Chamber of Commerce and Industry. Our goal is to double the number of apprenticeships next year and then offer them throughout Greece. We will continue to be a steady force for strengthening society and the economy in the years to come.