Lidl steps away from Estonian market

  • 2006-07-26
  • From wire reports
RIGA - The German retailer Lidl, whose grand entrance on the Baltic retail market has been anticipated, has dropped plans to enter the Estonian market and will sell the batch of real estate properties it has acquired over the years.

"Lidl has reconsidered its strategy because the Estonian market is too small," head of Lidl's Finnish operations, Antti Tiitola, said in an e-mail to Aripaev. In his words, competition has nothing to do with the decision. Tiitola was unable to explain why Lidl had decided on expanding to Estonia in the first place.
Most of Lidl's Estonian employees quit on mutual agreement, the director said, although some still remain on payroll.

Competitors greeted the news. "We are definitely not sorry," director of the Saastumarket chain Andres Kivistik said. The main problem, he explained, was that Lidl arrived in Estonia too late, during a time when the market was developing with great strides. Because construction and labor costs were especially high during this period, Lidl's business plan didn't suit the Estonian market, Kivistik explained.
Land registry data shows that Lidl Eesti owns 28 plots of land in Estonia. Much of this, however, is zoned as residential land and cannot be used for business activity.

The construction company YIT Ehitus' director for real estate, Rein Soosalu, said the monetary worth of Lidl's properties could be estimated at 400-500 million kroons (25.6 's 31.9 million euros).
The owner of the Lidl chain, Schwarz Gruppe, is the seventh-largest retail concern in Europe.