Lidl goes large on land, sites and partners search
Major mixed use Blarney village development with a proposed Lidl: the plan is under Judicial Review
DEVELOPERS are being wooed by rapidly-expanding retail operator Lidl, indicating the broadening mix of developments they may become part of, or enter into joint agreements on.
They’ll include extending the number of stores with residential elements especially, linking in with other retailers such as Jysk and Australian pharmacy Chemist Warehouse, along with other amenities, cafes, offices and integrating with social hubs.
The canvas approach to developments may also be of interest to other site and landowners, as the company which marked its 21st ‘coming of age’ milestone last year, during muted Covid-19 pandemic times laid out plans to invest €550 million in new stores and upgrades.
Some €150 million of that will be in the southern region of 43 stores in five counties served by the sprawling c 300,000 sq ft Charleville Regional Distribution Centre, built in the early to mid 2000s, and which is a nexus for 1,200 regional employees.
And, about €100 million of that sum alone is due to go into Cork city and county, reveals Conor Nagle, Lidl’s Regional Managing Director, with Cork targeted for c ten new outlets by 2024.
The 40-year old Limerick native’s comments come as they are about to go to tender for construction of a new €16 million store in Ballincollig. It's a redevelopment of its existing underutilised site at the West City Retail Park, creating a larger store, adjoining café, and joining with other retailers Jysk, Chemist Warehouse and with a unit targeted at an electrical retailer.
Elsewhere, Lidl’s plans to anchor a major, mixed-use development in a pivotal Blarney village centre location – the old Blarney Park Hotel site controlled by retailer Frieda Hayes and where a mixed-use 16,780 sq m retail and commercial scheme with residential element - is currently under Judicial Review with, it’s expected, a decision to be made in coming weeks.
Also imminent in the Lidl store roll-out plan is a store in the heart of Douglas village: again, it’s part of the emerging mixed-use model/scheme, to include eight overhead apartments.
It’s currently under An Bord Plananala review, and is Lidl’s second attempt to get into an affluent suburban Douglas location, having had a previous greenfield site rejected. The current anticipated site is located by KFC, McDonalds and the new Aldi which was built on the former Cinema World site.
If granted, the two discount German retailers will be cheek-to-jowl, or, within a trolley-dash of one another, in a Cork suburb as they are in many other locations, such as Cork’s Wilton. The Bord decision on the Douglas store is considered to be imminent.
Right now Lidl is ahead of Aldi in terms of store location roll-out: it has c 173 stores in the Republic since coming here in 2000, vs Aldi’s 150 since it arrived a year earlier in 1999: Lidl has 40 additional stores in Northern Ireland, while Aldi does not operate in the North.
Latest Kantar retail market figures show Lidl with a 12.2% share of the Irish grocery market, Aldi has 11.7%, while the jostling continues for the title of biggest retailer between Dunnes, currently at 23% with 114 stores in the Republic and 17 in Northern Ireland, SuperValu at 22% (with 223 stores here) and Tesco (152 stores) at 21.9% market share.
On a recent Irish Examiner visit to and tour of the Charleville Distribution Centre (disappointingly, there is no enormous ‘Centre Aisle’ – all the specials for the coming weeks are in anonymous brown boxes and crates) Regional MD Conor Nagle said they were very deliberately targeting Cork developers, with aims to expand sites taking in lease or purchase options, joint developments and more.
These are an evolution from the typical store stand-alone model to date of 1,300 or 1,700 sq m stores on 2/2.5 acre sites with parking: site costs can vary from €600k to €6m, and currently construction inflation which had been in low, single-digit figures, is now showing at 13-14%.
The already announced three-year €550m Lidl investment nationwide includes upgrades; 24 ‘knock and rebuilds’ in some areas and second stores in some single town locations, such as recently delivered in Ennis.
Meanwhile in Thurles it has moved to a more central site, and let out the old store to Jysk (CBRE are Lidl’s property advisors, but they have their own strong team with six property managers also plus in-house specialists.)
Location decisions are made on several criteria, with profitability/viability assessments made on the basis of things like Census figures (the 2022 April Census will inform medium-term decisions); local development plans and zoning changes; new roads and infrastructure investment; the 2040 National Development Plan’s strategies to grow populations in and around cities like Cork, Limerick and Galway; and footfall and catchment, taking into account the imperative not to cannibalise trade at existing stores.
As the Aldi/Lidl retail models evolve into more mixed-use opportunities, with 360 stores between them to date and now accounting for a c 25% slice of Ireland's competitive retail ‘cake,’ the relatively recent arrivals with two decades+ experience here continue also to broaden their community involvement and roots, Regional MD Conor Nagle (he’s added German to his linguistic repertoire, having studied Spanish and Archaeology in UCD before adding business nous via the Smurfit School in Dublin) is keen to point out.
He instances Lidl’s support for youth mental health charity Jigsaw, Lidl’s multi-million euro sponsorship of the Ladies Gaelic Football Association (LGFA), Food Distribution, and Autism Aware nights at stores, as well as an increasing involvement with Ability@Work, with 15 staff with some special needs now joined them, via Cork’s Cope Foundation.
And, the past two years of the Coronavirus have also shown how retail is in just about every way a barometer of social change, trends, and economic activity in Irish society.
Having stayed open right through the pandemic - as did just about every other retailer - Mr Nagle mentions the adaptations Lidl had to quickly make in what he terms their ‘Staycation’ stores.
These Staycation stores, in locations as geographically diverse as Dingle, Clifden, Westport, Kenmare, Clonakilty, Kinsale and Skibbereen, all saw a surge in activity, for lock-down holiday periods and even for those who relocated to ‘work from home’, often in second locations.
Such stores had to stock shelves, adapt ranges and increase staff to reflect the shift in population and activity, whilst others – such as the one in Cornmarket Street in a Cork city centre building basement (itself getting a €2m upgrade) – saw a temporary lull or drop as offices deserted the city core.
The impacts of war in Europe have yet to play out, however.
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