Competition in the Irish grocery trade is set to become even more intense following the disclosure by German discounter Lidl that it is looking for sites for more than 60 additional stores on both sides of the Border.
The planned expansion is thought to be the largest by any of the main grocery multiples and coincides with signs of a continuing recovery in consumer spending in the Republic.
Lidl is already one of the largest retailers in Ireland with 143 stores and a further 38 in Northern Ireland. The other German discount chain Aldi has 115 stores in the Republic but does not trade in Northern Ireland.
Lidl has appointed CBRE’s Dublin and Belfast offices to find key sites in cities and towns to facilitate the expansion. After opening its first store here in 2000, it expanded rapidly and “experienced unparalleled growth throughout their lifetime in Ireland,” according to the company.
As part of the continued expansion strategy it says it is “looking to open additional 60-plus stores on high profile sites with good visibility and accessibility.”
Freehold properties
The ideal site will be two acres in size though smaller plots of around one acre will be considered in high density urban areas. There is also a preference for freehold properties to accommodate stores ranging in size from 1,800 sq m to 2,400 sq m (19, 375 sq ft/25,833 sq ft).
Florence Stanley, head of retail at CBRE Dublin, said that as well as mounting a countrywide search for suitable sites, they would be contacting local estate agents to find the best business locations.
“It might take a while to fulfil our commitment but if we manage to line up 60 sites within three years our client would probably be happy.”
While most of the existing Lidl properties have substantial parking facilities, the company has also been able to avail of smaller, well-located sites by putting the stores on stilts and using the space underneath the building for parking.
One such store is located on the 1.14-acre former Sunday World site in Terenure which recently opened for business.
That site was bought by a residential development company during the property boom for €18.3 million and was acquired after the crash by Lidl for more than €4 million.
Not good news
Tara Buckley
, director general of the Retail Grocery Dairy and Allied Trades Association, said 60 discount supermarkets was not good news for Irish towns and villages.
A report by economist Jim Power had shown that a euro spent in a locally owned shop was worth three times more than one spent in a British or German chain. At the end of the day their profits go back to Germany or the UK.
Lidl’s share of the discount market in the North has risen significantly over the years though surprisingly the company has not been challenged in that market by Aldi. That company recently confirmed that its planned £600 million expansion in the UK – it is to open another 550 outlets – will not include Northern Ireland.
Meanwhile, Tesco is still mulling over the long delayed megastore planned for Liffey Valley Shopping Centre in west Dublin. It has denied it is to be abandoned just like 49 other supermarket projects in the UK.
Planning permission for the store was granted by An Bord Pleanála in June 2013 and, according to an official spokesperson, the company is "working through planning compliance with the local authority and as such a commencement date for the development has not yet been finalised".
