Economic Factors and Their Impact on Lidl's Business Operations

This report examines the key economic factors that have contributed to Lidl's growth both domestically and internationally, focusing on how these factors have shaped the company's operations. It highlights the significance of employment rates, noting that increased employment leads to higher consumer spending, benefiting Lidl's sales targets. The report also discusses the impact of interest rates, emphasizing that lower rates enable Lidl to invest more in manufacturing units and other business operations. Furthermore, it underscores the importance of labor productivity and the need for satisfied workers to drive profitability. Finally, the report analyzes the influence of government activities such as subsidies and taxing policies, particularly how export subsidies and lower oil prices have aided Lidl in expanding its business operations and offering quality products at lower costs. Desklib provides students access to similar solved assignments and study resources.

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Table of Contents
MAIN BODY...................................................................................................................................2
Economic factors that have been key to Lidl's growth domestically and internationally and
how they have shaped Lidl's operations- ...................................................................................2
REFERENCES................................................................................................................................5

MAIN BODY
Economic factors that have been key to Lidl's growth domestically and internationally and how
they have shaped Lidl's operations-
 Employment rate- The employment rate in United Kingdom was 75.5% for the month
of June from August in the year 2022 which is said to be 0.3% lower than the previous
quarter that is March to May in the same year 2022 (Labour market overview, UK:
October2022,https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/
employmentandemployeetypes/bulletins/uklabourmarket/october2022#:~:text=The
%20UK%20employment%20rate%20for,while%20self%2Demployed%20workers
%20increased). Employment rate had helped Lidl in growing their operations
domestically and internationally. Employment rate is helping in estimating the working
age population. The current employment age is between 20 and 64 in United Kingdom. It
is good to have increased employment rate because it leads to more consumer spending.
If the consumer is spending more than the Lidl will be benefited as they will achieve their
sales target in a short period of time.
 Interest rates- Interest rates affect the cash flow within the economy. For Lidl it is
important that the company is growing their operations in the countries where the interest
rates are low. Lower interest rates will help the company in taking out new loans, so that
they can invest their money on manufacturing units (Hazen and et. al., 2018). Lower
interest rates on loans will help Lidl in spending more on their business operations for the
long run. When the interest rate is low the company can spend their available cash on
more important activities which are yielding higher profits. Lower interest rates have also
increases consumer spending, as they do not have to pay high interests on loans which
will allow them to spend on other items.

 Labour- Labour productivity is the important economical factor which affects the
business operations of Lidl. For Lidl, it is important that they increase their productivity
by yielding higher profits with the help of their labourers. In the longer run increased
productivity comes when the workers are satisfied and they have higher wages according
to their requirements. Labourers are important for Lidl as they are engaged in doing the
business operations. Motivated labourers bring higher profits and bring more opportunity
for investment. It is important for Lidl to satisfy the labourers and the workers so that
they will bring greater productivity within the business operations.
 Government activity- The government subsidies and taxing policies are influential
factor which affects the growth of Lidl's operations. The UK government has provided
export subsidies, which had helped Lidl in paying fewer taxes on their exports (Luo and
Choi, 2021). Fewer taxes on export gods will motivate the companies to sell more outside
the national borders. Thus more international orders will help Lidl in expanding their
business operations throughout the international borders. The government is also
providing oil subsidies which had helped the company in bringing down the oil prices.
Decrease in the oil prices had helped the company as they are using oil for the
manufacturing purposes and transportation purposes. Thus the company can offer their
customers quality products at lower costs, which will directly increase the demand from
the customers.

REFERENCES
Books and Journals
Hazen and et. al., 2018. Back in business: Operations research in support of big data analytics for
operations and supply chain management. Annals of Operations Research, 270(1),
pp.201-211.
Luo, S. and Choi, T.M., 2021. Great partners: How deep learning and blockchain help improve
business operations together. Annals of Operations Research, pp.1-26.