Interview with Stefan Kopp - CFO of Lidl Switzerland

Deloitte: How has your company fared during the COVID-19 crisis so far?

Stefan Kopp: As a food retailer, we were allowed to keep our branches open during lockdown. We had to draw up, implement and review effective arrangements to protect staff and customers while we were trading. Day in, day out, our staff have delivered top performance and demonstrated incredible team spirit.

Deloitte: What have been the most tangible impacts and challenges?

Stefan Kopp: Demand suddenly became very unpredictable and fluctuated wildly, and this had an impact on our logistics and on the way our branches operated. These exceptional circumstances brought our teams even closer together. We’re really grateful to our staff for their unstinting efforts and the solidarity they have showed.

Another challenge was the frequent changes in the statutory framework: we were constantly having to interpret new legislation at very short notice and put logistical and organisational changes in place immediately.

Deloitte: Customers’ patterns of behaviour changed during the crisis. There was increased demand for some product groups that shoppers considered to be essential. More customers were also paying by card and, where possible, shopping online. Do you think that these changes in consumer behaviour will persist even when the crisis has passed?

Stefan Kopp: Some long-term trends, such as a greater interest in organic, vegetarian/vegan and regional foods, are likely to become even more marked as a result of the current crisis. However, some of the changes we saw in shoppers’ behaviour during the crisis – the increase in demand for tinned food, for example – were a short-term phenomenon. Since the restrictions have been eased, that kind of demand has also eased.

However, we don’t think many consumers will be switching back to cash payments. We saw double-digit growth in the use of card payments, and consumers have come to appreciate the advantages of paying by card or by app, so we believe that they will go on using such payment methods even when the crisis has passed.

Deloitte: What impact has the crisis had on your supply chains? Have you relied more on local suppliers, for example?

Stefan Kopp: In some areas and for specific products, there was temporary disruption of the supply chain. This was usually caused by logistical bottlenecks, and in almost all cases customers were able to switch to an alternative product of the same quality. We worked closely with our suppliers, though, and were able to resolve most of these short-lived bottlenecks quickly.

We’ve relied on local suppliers since we entered the market in 2009 and we are constantly expanding our supplier network. Lidl Switzerland collaborates with over 300 Swiss suppliers, and 60 of them have been with us right from the early days, so these are long-term partnerships. And that means that we didn’t have to make short-term switches of supplier as a result of the crisis. More than 55% of our turnover is still of Swiss products.

Deloitte: What do you think has been the role of CFOs in this crisis? How were you as CFO able to help your company through the crisis?

Stefan Kopp: There are a lot of demands on CFOs. Along with the CEO and other senior executives, CFOs are part of the top management team. Among other things, their role is to bring clarity to the ever-changing statutory framework, to build relationships with key stakeholders, to get necessary measures up and running rapidly and pragmatically, and to ensure good crisis communications with the workforce. All this, of course, is in addition to their more traditional role in areas such as managing liquidity.

Deloitte: What has your experience of the crisis been as a CFO? (Are there any specific lessons to learn for a future pandemic?)

Stefan Kopp: We got our crisis team up and running very quickly. We were taken a little unawares by how quickly the crisis gained momentum. It is important to allocate all the internal resources needed really rapidly. The crisis team, for example, should always include one staff member with responsibility solely for monitoring the press and another who documents every internal decision and measure agreed on an ongoing basis, so that there is a ‘single point of truth’.