"Lidl to create 600 new jobs"

Brendan Burgess

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This was the leading item on the RTE Radio 1 news this morning.

It was also mentioned separately in the business news.

Why is this newsworthy? They will not be additional jobs. If Lidl is doing well, it means that some competitor is losing jobs.

It's not the same as a US multinational setting up an export oriented manufacturer or service provider in Ireland. When that happens,600 extra jobs are created.

Of course, the opposite is true as well. When Clery's closed down, we didn't lose 460 jobs. They were just moved around - to the likes of Arnott's, Brown Thomas and other high street retailers.

Brendan
 
Brendan Burgess said:
Of course, the opposite is true as well. When Clery's closed down, we didn't lose 460 jobs. They were just moved around - to the likes of Arnott's, Brown Thomas and other high street retailers.
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That's not strictly true Brendan. When a job is lost in the domestic non-traded economy, its not axiomatic that it's replaced elsewhere. Quite often, the burden is absorbed by the existing workforce. Equally when a job position is created and sustained by a gain in output, the corresponding output loss experienced by competitors may not be sufficient to generate job losses.

IIRC the technical term for this is the replacement rate, or the replacement ratio. When I studied this decades ago, a typical replacement rate quoted was 0.7, ie for every 10 jobs lost, only 7 are created.

In Lidl's case, I would expect the replacement rate to be poor, as a highly-automated selling operation is effectively replacing a host of smaller more labour-intensive competitors.
 
T McGibney said:
In Lidl's case, I would expect the replacement rate to be poor, as a highly-automated selling operation is effectively replacing a host of smaller more labour-intensive competitors.
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Good point.

So if a labour-intensive, inefficient supermarket loses market share to Lidl, it may well result in a net loss of jobs? Lidl creates 10 new jobs to serve 5,000 customers, but the existing supermarket needed 10 employees to serve those 5,000 customers.

Are you arguing that the existing guys are so inefficient, that they won't let go of anyone?
 
Hi Brendan

I'm not arguing anything, in fact I really like and admire Lidl.

I'm just observing that if (for argument) each new Lidl shuts a few corner shops, the greater efficiency of the Lidl operation may well mean a net loss of jobs overall. But on the other hand if the corner shops manage to stay open, albeit at lower trading volumes, the marginal staff losses there would be outweighed by the extra jobs in Lidl.
 
Walk around any Dunnes Stores and compare staff levels to Lidl/Aldi!
 
Efficiencies in the economy reduce costs for all of us. That means a lowering of the CPI and a reduction in the cost of living. That's good news for the economy and population in general. Paying someone to do an unnecessary job amounts to the same thing as that person being paid to be on the dole.
 
Purple said:
Can you save me the walk and tell me what my conclusion would be?
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Dunnes seem to have the hoardes from The Walking Dead working for them.
Lidl/Aldi seem to have the lesser spotted Roadrunner
 
I think that we have growth in this case and that it is extra jobs as there are more people earning more money. Of course if/when we have a drop in growth then it's a different matter.
 
Deiseblue said:
I particularly liked the Waterford whispers headline - 3 injured in rush as 2nd till opens in local Aldi !!
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Very good!

One thing I'd say about Aldi & Lidl - their staff work very efficiently but they don't seem to have an issue with retention - I see the same people behind the till for a number of years, so I'm guessing the terms are pretty decent.
 
I can't speak for Aldi but Lidl staff tell me they are good to work for and pay excellent hourly rates. The hours are long though and the starts are very early, can be as early as 5am.
 
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