Lidl invests £15bn in British suppliers

Lidl GB is investing a "record" £15bn in British suppliers over the next five years to provide stability and support the growth of businesses.

The supermarket said it would implement longer-term contracts with its suppliers to provide certainty and to allow them to invest for the future, create new jobs and develop their businesses. 

Lidl has also pledged to increase sales of British sourced fresh meat, poultry, and produce by over 10% across the next 12 months.

Ryan McDonnell, chief commercial officer at Lidl GB, said: “As our business continues to grow, it’s vital that our suppliers remain at the heart of our growth plans, and that is why we are committing to investing at least £15 billion over the next five years. 

“Our business is only ever as good as our suppliers, so our investments and commitments are key to ensuring that they can invest and expand with us. 

“Long-term partnerships with farmers are all the more important during economic uncertainty, and with 2019 marking our 25th anniversary, we are more committed than ever to supporting our suppliers here in Britain and offering customers British-sourced products in the future.”

Tom Hulme, of A.C. Hulme & Sons, which is Lidl’s main supplier of apples and pears, said: “We wouldn’t have even contemplated upgrading our packhouse if it wasn’t for our confidence in Lidl’s future custom. The company has stayed true to its word with its growing orders over the years, giving us certainty in an industry that faces many uncertainties – like the British weather.”

Earlier this year, the supermarket said it would source 100% of its fresh poultry from UK farms from October 2019.

In August 2019, Lidl Ireland told British suppliers it would be their responsibility to pay EU import tariffs after Brexit. 

The supermarket’s contracts with suppliers include a Delivered Duty Paid (DPP) clause, which means the cost of transporting goods, including tariffs, is the suppliers’ responsibility. 

Lidl said it had been communicating with its suppliers to minimise any disruption. 

Meanwhile, a survey by software company Coupa revealed the UK’s senior finance decision-makers have been preparing for Brexit for the last year but supplier relationships and spend visibility are still a concern for businesses. 

Over half (54%) cited supplier relationships as the part of their business most likely to be impacted by Brexit, and 51% of respondents said that on the day of Brexit they expect to renegotiate contracts with their suppliers to return to business as usual. 

Ahead of the UK leaving the EU on 31 October, nearly two-thirds of decision-makers (63%) said they lack complete visibility into their business spend, and 62% admitted that they are not very confident in their company’s spend decisions. 

However, two-thirds said stockpiling is an effective precaution for businesses in uncertain economies.

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