Lidl Hungary CEO Calls for End to Retail Freeze, Open to Kaufland Entry

Why Lidl‘s CEO Wants Hungary’s Retail Freeze Lifted

Hungary’s retail development ban, commonly referred to as the “plázastop,” is squeezing the expansion plans of the country’s top discount chain, according to its most senior executive, Eszter Szlavikovics. The chair of the board at Lidl Hungary told Forbes.hu that the moratorium, which restricts the opening of new large-format stores, is “clearly targeting the retail sector” and preventing the discounter from growing beyond its current 220-strong network.

Szlavikovics said the company is actively looking for sites in 55 other towns and cities, but the regulatory barrier means those projects cannot move forward. “We are happy to comply with the rules, but the current framework pushes us out of development,” she said, adding that recent tweaks even restrict leased properties. She also called for a phase-out of the special retail tax, revealing that Lidl paid 60 billion forints (about €150 million) in that levy last year out of total tax contributions of 321 billion forints. Meanwhile, on the possibility of sibling brand Kaufland – the hypermarket chain owned by the same Schwarz Group – entering Hungary, Szlavikovics said it “would find a place” but the plázastop would make launching a chain with multiple stores a complicated affair. She acknowledged that the different product range at Kaufland already attracts Hungarian shoppers to nearby Slovakia.

What the Lidl Boss‘s Comments Reveal About Competition and Tax Strategy

The Plázastop‘s Chokehold on Retail Competition

The Hungarian government’s de facto ban on new retail developments over 400 square meters has been in place in various forms since 2021, freezing the footprint of big-box and discount chains. Lidl’s complaint highlights how the policy protects existing players—whether domestic or foreign—while blocking dynamic expansion. With 55 locations on hold, the discounter’s growth engine is effectively stalled, raising the risk that market share gains will slow just as inflation and household budgets make price competition even more critical. Szlavikovics’s blunt characterisation of the measure as a “limitation” signals a rare public push from a major investor that typically keeps a low political profile.

A Kaufland Launch: Synergy or Cannibalization?

Kaufland operates hypermarkets that are several times the size of a typical Lidl discount store, offering a far broader assortment including non-food items. The suggestion that the brand has “a place” in Hungary is a significant signal from inside the Schwarz Group, which owns both chains. A Kaufland entry, which would need multiple outlets to be viable, could complement Lidl by capturing a different shopper segment without direct cannibalisation—much as the brands coexist in neighbouring markets like Romania and Slovakia. However, the plázastop effectively kills any near-term rollout, making the comment a conditional invitation for policy change rather than an imminent market entry.

Tax as a Lever: Reading the CEO’s Message to Budapest

By publicly demanding a phase-out plan for the special retail tax and promising to pass any VAT reductions directly to consumers, Szlavikovics is weaving together corporate self-interest with a consumer-friendly narrative. The disclosed 60 billion forint levy payment underscores the scale of the burden, giving policymakers a concrete figure to weigh against potential investment and job creation if restrictions were eased. The tactic echoes similar campaigns by large retailers across Central Europe, where governments rely heavily on sector-specific windfall taxes. For the government, the interview represents a clear push-pull: keep the moratorium and tax revenue, or risk losing investment momentum to countries with more welcoming frameworks.

Next Moves for Schwarz Group, Competitors and Regulators

• For the Schwarz Group: Intensify lobbying with the Hungarian government to exempt large-format stores from the plázastop or create a pathway for mixed-format expansion to enable both Lidl’s 55-site pipeline and a potential Kaufland launch. Frame the ask around the €150 million special-tax contribution as evidence of economic commitment.
• For Lidl Hungary: Proceed with site acquisition and pre-development work in those 55 target settlements, ensuring readiness for a rapid building programme if the moratorium is eased. Continue to publicise the link between tax policy and consumer prices to maintain public pressure on regulators.
• For Competitors (Aldi, Tesco, Spar): Monitor any softening of the ban as it could unlock a new hypermarket rival with a different format. Kaufland’s larger stores would compete not only on price but also on range, potentially reshaping local market shares even outside the discount segment. Defensive planning on pricing and assortment in areas where the chain might locate is warranted.
• For Hungarian Regulators: The CEO’s remarks highlight that the plázastop is seen as a direct obstacle to investment by large foreign retail groups. A review could unlock significant capital expenditure and job creation in underserved towns—if done transparently—without sacrificing planning controls that apply equally to all players.