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German supermarket chain to open 100 new stores in Denmark

A major investment by German supermarket giant Lidl could mean better prices and products for customers in Danish stores.

Published: 19 February 2019 14:43 CET
Updated: 19 February 2019 16:47 CET

German supermarket chain to open 100 new stores in Denmark

File photo: Liselotte Sabroe/Ritzau Scanpix

The coming years will see 103 new Lidl stores opening across Denmark, the German company’s director for Denmark has confirmed.

Between 10-15 stores will be opened annually, and one billion kroner will be invested by the company in Denmark to that purpose in 2019, Lidl’s Denmark director Dirk Fust told media Fødevarewatch.

The discount chain is one of the world’s largest, with over 10,000 stores in 30 countries. It currently has 117 stores in Denmark.

“Our main focus is on Aarhus and Copenhagen,” Fust told Fødevarewatch.

“We only have 5 stores in Aarhus and 20 in Copenhagen. I believe there is room for 60-80 Lidl stores in the capital region. That’s a big challenge, and it costs a lot of money to open a store in Copenhagen,” he added.

The move by Lidl will stiffen competition in the discount supermarket sector as it joins stores including Netto and Fakta in contesting market share.

Netto currently has 100 stores in Copenhagen and 500 in total in Denmark.

German chain Lidl opened its first supermarket in Denmark in 2005.

“We have good stores in Jutland and on Fyn, but are under-represented in Copenhagen,” the company’s international CEO Jesper Højer, who is Danish, told Fødevarewatch.

Aarhus University associate professor Lars Esbjerg, who has researched customer relations in the food sector, said Lidl is one of a series of chain stores preparing to compete on the discount supermarket scene.

“All discount chains on the Danish market want to expand,” Esbjerg said.

“It is not the case that there is a gap in the market which Lidl can fill. They will take (a share) from the others and from small stores,” he said.

Consumers can expect more than just low prices as a result of the competition, the associate professor added.

“We can look forward to smart prices when we are shopping. But we can also look forward to discount stores focusing on other things than just prices: higher quality products and animal welfare, for example,” he said.

READ ALSO: These are Denmark's most – and least – popular supermarkets

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Pictured is Norway and Sweden's border on the old Svinesund bridge.

Will the return of border shopping have a negative affect on the country? Pictured is Norway and Sweden's border on the old Svinesund bridge. Photo by Petter Bernsten/AFP.

In eastern Norway, particularly along the border with Sweden, cross-border shopping has long been common for residents looking for cheaper groceries and a better selection of products.

Norway’s Covid-19 rules effectively put a stop to that until this summer. The closed border meant a record year for food and beverage sales in Norway.

“Due to the fact that there was little action and that people did not travel, we noticed that our sales increased greatly during the entire period,” Øyvind Berg, production manager at Norwegian dairy firm Synnøve Finden, explained to public broadcaster NRK.

Now producers and supermarkets fear the impact of cross-border shopping being up and running again.

“Our challenge is that we see that more than half of the food and beverage producers, i.e. the industrial companies, fear that they will lose market share because cross-border trade will return in full,” Petter Brubakk, director of food and beverage at the Confederation of Norwegian Enterprise (NHO), informed NRK.

The majority of those who go shopping across borders in Norway will do so in Sweden. However, in the north, some will also venture into Finland or Russia.

Further south people will also travel to Germany or Denmark.

Why do people go to other countries for shopping?

Overall the main appeal of cross-border shopping is that its much better for consumers than shopping domestically.

Norway’s EEA agreement with the EU means that most foods, drinks, tobacco products, alcohol and other agricultural products are more expensive than they are within the EU as custom duties are required to import them into Norwegian supermarkets.

Not just that, but there is a much wider selection of products than in Norway due to laws that protect Norwegian products. For example, cheeses such as Cheddar are more readily available, cheaper and generally of better quality in other countries than those found in Norway.

READ MORE: What is ‘harryhandel’, and why do Norwegians love it so much?

Is border shopping a bad thing for Norway?

Norwegian businesses argue that crossing the border to shop affects the whole value chain, negatively impacting everyone from Norwegian farms and producers to supermarket employees, not just companies profit margins.

“My advice is to encourage Norwegians to buy Norwegian food, and help secure Norwegian jobs throughout the value chain,” food and agriculture minister Sandra Borch told NRK.

In addition, shopping domestically means more tax revenue for the Norwegian system to use to fund its generous welfare state.

While shopping domestically protects domestic jobs, shopping abroad protects jobs there, which rely on people hopping the border to get their groceries.

Coronavirus pandemic restrictions left a black hole in some of these economies reliant on shoppers from the Norwegian side of the border. For example, in Strömstad, a Swedish town close to the border where many travel to shop, unemployment rose by around 75 percent after Norway closed its borders with Sweden.

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