How the son of a Westmeath dairy farmer controls sales of €1.4bn a year at Lidl

The Germany grocer has became one of the biggest exporters of Irish food

'There are more than 10,000 Lidl stores in Europe, so the opportunity presented for an Irish food or drink producer in getting a wide listing within the group is enormous,' says 35-year-old John Paul Scally
'There are more than 10,000 Lidl stores in Europe, so the opportunity presented for an Irish food or drink producer in getting a wide listing within the group is enormous,' says 35-year-old John Paul Scally
John Mulligan

John Mulligan

With more than 10,000 Lidl stores across Europe, the dairy farmer's son who's heading up Lidl in Ireland says the Germany grocer provides "enormous" potential for Irish food and drink suppliers.

JP Scally is the son of a retired dairy farmer from Westmeath and is the managing director (and chairman) of Lidl Ireland - a retail operation that includes almost 200 outlets (38 in Northern Ireland) and in the Republic has sales of about €1.4bn a year.

Scally says that Lidl Ireland is one of the big exporters within the wider group of domestically-produced goods. "Last year, we exported more than €200m worth of Irish produce," he says.

"There are more than 10,000 Lidl stores in Europe, so the opportunity presented for an Irish food or drink producer in getting a wide listing within the group is enormous."

Meat is exported to Lidl shops in 12 countries by Slaney Foods (which has also inked a new deal to supply meat to Lidl in the US) and Liffey Meats; cream liqueur to 10 by Cavan-based manufacturer Terra; while Kildare-based Comerford's Bakery sells Lidl a whopping 52 million buns a year, and also now exports buns to Lidl UK.

Scally says the chain doesn't charge suppliers so-called 'hello money', or a premium for shelf space - both of which were ostensibly outlawed last year for retailers with annual turnover of more than €50m, unless the terms were already included in a pre-existing contract.

On the shelves, Scally says that Lidl's products are between 20pc and 40pc cheaper than those at rival chains, with many of the goods made by the exact same suppliers. The packaging's just different.

"We saw a gap in the market to do something," says Scally. "It wasn't so much about the products, but about how we can support small food suppliers because we've benefited a lot from the Irish food and drinks industry ourselves. It gives them the leg-up they might need and who knows where the future might take them."

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He also said that the Irish and other country teams have significant autonomy from head office in Germany, without deviating from the group's core principles.

"When it comes to specific product offering in stores, when it comes to our specials and the way we manage the business in terms of recruitment and training, that's different from country to country," he says.

The latest figures show that Lidl has a 12.1pc share of Ireland's grocery market based on the value of sales.

"We're a private company and we don't disclose our profit and loss, but we do work on very tight margins," says Scally. "We're not beholden to shareholders at the end of every quarter. We don't have to deliver on targets and we can reinvest in the company."

Lidl is owned by the family-owned Schwarz group in Germany, which also owns retailer Kaufland. It's the second-largest retailer in the world after Walmart.

It recently opened its 152nd store in the Republic, in Portmarnock, Co Dublin (two more will open later this year, at Wilton and Bantry in Cork).

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