WB supports Lidl’s and Kaufland’s expansion in Romania following a EUR 60 M loan

Lidl and its sister company Kaufland through the parent company Schwarz Group has recently received a loan of EUR 350 million from the World Bank (WB) to finance their expansion in Romania, Serbia, Poland, Bulgaria and Croatia, igd.com reports.

The news comes after The Guardian revealed at early July that the companies, owned by the large retail company Schwarz Group and controlled by one of Germany’s wealthiest families, received loan funding from a little-known wing of the WB – IFC – and from the European Bank for Reconstruction and Development (EBRD). Thus, Lidl and Kaufland have benefited from almost USD 900 million in public development money over the past decade, as these public institutions are funded by taxpayers and owned by governments.

The retailer’s Romanian operations will receive EUR 60 million, enabling it to continue its strong expansion plans in a market where it already operates over 200 Lidl and Kaufland stores. The quoted source forecasts that Romania will be one of Lidl’s top five fastest growing markets by revenue within the next three years.

Lidl just has launched last week a new advertising campaign in Romania, aimed to enhance price perceptions. In Romania, Lidl also publishes the prices of its 1,600 permanently listed products daily at 09:00.
“In some cases, retailers in these markets don’t offer consistent prices in Croatia and Romania. Prices here can be dependent on the location and local competition. Lidl has cleverly spotted this weakness and has turned it to its advantage. Given that Croatian and Romanian shoppers are very-price sensitive, Lidl’s price transparency and consistency should drive more footfall, while reassuring existing shoppers,” the source shows.
In Romania, Lidl has opened more than 185 stores since 2011 – an average of almost one a week for four years. Kaufland is first hypermarket chain that exceeded the threshold of 100 stores across the country. Last year the company had a turnover of RON 7.9 billion, up by 10 percent compared to 2013.