Lidl suffers losses of £76million at its British arm due to soaring costs

Discount supermarket Lidl has reported its British arm was hit by large annual losses after costs shot up “across the board” over the past year.

The company had pre-tax losses of £76million for the year to February 28 after profits of £41.1million ths previous year.

However, sales increased 18.8 percent to £9.3billion across the year and it has increased its share of the supermarket sector.

The company said the losses were caused by cost inflation and large investments in keeping prices down for shoppers, as well in wage increases, and in opening new stores and taking on new suppliers.

Lidl has made some of the biggest increases in supermarket share over the past 12 months, alongside rival Aldi, according to figures from Kantar.

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Over the past month, Lidl has grown its sales by 16 percent while Aldi has increased its sales by 17 percent, with the two supermarkets now having 17.7 percent of the sector.

Analysis from Kantar said: “We expect this performance to continue as inflation remains stubbornly high, however, growth rates for both the discounters have been slowing in recent months as they annualise against rapid rises last year.”

Own-label sales, which make up a large part of Aldi and Lidl’s products, have also shot up recently, increasing 9.9 percent over the past month.

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Tesco and Sainsbury’s have worked to keep up with the discount chains by reducing prices and promoting their loyalty schemes.

Prices have been cut for many staple items across the supermarket sector, including pasta, cheese, bread and coffee.

Sainsbury’s and Tesco enjoyed the fastest growth over the past month with sales increasing 9.1 percent and 9.3 percent respectively.

With the growth for the two established chains, Tesco’s share has increased to 27.2 percent, an increase of 0.3 percentage points from last year, while Sainsbury’s is at 14.8 percent, up by 0.2 percentage points.

However, shoppers still face hugely increased prices compared to a year ago, with inflation at 12.2 percent for the four weeks to September 3.

Food inflation has been steadily decreasing but prices for many items are still continuing to go up increasing the pressure on people’s budgets.

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