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As Rewe Group’s operations announce various investment plans, we round up news from the company’s operations in Germany, Austria and Romania.

Rewe highlights benefits of self-scanning technology

After announcing the trial of self-scanning technology Rewe has said the initial feedback from shoppers has been positive. Rewe is offering shoppers the chance to scan their purchases either using a hand-held scanner or their mobile phones. Shoppers activate the scanners using their payback card.

The company said it had seen a steady growth in the number of shoppers using the technology since their introduction. From an operational point of view, Rewe noted that the implementation of the technology was freeing up time for store staff to invest in other areas of the store, such as on restocking shelves or engaging with shoppers.

Rewe to maintain investment in Romania

After announcing a positive performance for the country in its 2018 annual results, Rewe has said it will invest RON2.32bn (US$550.7m) in its Penny banner in Romania over the next seven years. The money will be spent on opening between 20 to 25 stores annually, with the aim of operating 400 stores in the country by the end of 2025, and in the modernisation of existing stores. To support the growth in store numbers, Rewe is also looking to open its fourth distribution centre in the country, in the Oltenia region.

Rewe to roll out Apple Pay in Austria…

Following its launch in the country in April, Rewe has announced it will accept payments via Apple Pay across all its banners in Austria. The company said the process would enable payments to be made quickly at NFC-enabled in-store payment terminals using shoppers iPhones or Apple Watches. Commenting on the roll out of the technology, the CEO of Rewe International, Marcel Haraszti, said: “We want to make our customers’ everyday lives as easy as possible. With the introduction of Apple Pay, we offer them an additional way to make shopping and payment even faster and easier.

…As it partners with other companies to launch the jö Card

In conjunction with OMV, BAWAG, Libro, Pagro and Interio, Rewe has said it has established the biggest shopper loyalty programme in the country. Across all its banners and in participating ADEG merchants, and in partners’ stores, shoppers will be able to earn points on every purchase they make. Shoppers will be able to redeem the points for benefits and promotions on an individual basis.

Rewe said the loyalty programme will be backed by an independent company in its Group structure. The entity will be led by Ulrike Kittinger, head of Analytics, Marketing, CRM, and Personnel Management, and Mario Günther Rauch, Business Services, Partner Management, Strategy and Innovation, and Finance and Legal Affairs.

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Germany-based Rewe Group has announced plans to acquire 100% of the shares in Lekkerland as it looks to target the growing on-the-go shopper. No financial details were released in relation to the deal. The merger of the two companies, though, will require clearance of the competition authorities in Germany, which is not assured.

Acquisition would lead to new business unit

Announcing the deal, Rewe and Lekkerland said the merger would lead to the creation of a new business unit in the Rewe Group, under the name ‘Convenience’. Rewe said the merger would enable it to better target the fast growing on-the-go consumption trend, which it described as ‘one of the areas offering the most promising growth prospects in food retail’.

The companies said the grouping would enable them to combine their differing expertise to maximise the opportunity within the on-the-go trend. They highlighted that Rewe had ‘ expertise in the goods and category management business areas’, which would compliment ‘ Lekkerland’s logistical performance capability and varied wholesale expertise’.

Combination would lead to €73bn company

Rewe revealed a strong performance in 2018 in its recent annual results, where it said revenues rose 4.7% to €61.2bn. Announcing the deal, the companies said Lekkerland generated a turnover of €12.4bn through sales to its client base of service stations, kiosks, convenience stores, bakeries, food retailers and quick service restaurants.

However, it is not guaranteed that the competition authorities will sign off on the deal. The protracted acquisition of Tengelmann’s Kaiser division by Edeka and Rewe, which took close to two years, shows how the acquisition of Lekkerland may not be smooth.

A lot will depend on how the authorities define the market. Rewe’s acquisition of Lekkerland mirrors Tesco’s purchase of Booker in the UK. While many expected the purchase to face scrutiny from the UK’s Competition and Markets Authority, ultimately the purchase was approved without conditions. Given Lekkerland’s presence in seven countries in Europe and supply of 91,000 points of sale, the acquisition could face challenges from a number of places.

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German-based drugstore operator Douglas has reported LFL growth of 2.0% and increase in total sales of 4.8% to €1.95bn for the six months to 31 March 2019. The retailer's store estate grew by 0.7% to 1,611 stores.

Online performed particularly strongly with sales growth of 36.8% to €327mn, accounting for 16.8% of total sales.

Germany: strong growth boosted by online

In its domestic market Douglas achieved sales growth of 9.5% to €717mn compared with the same period last year. Online accounted for 28.9% of revenue share in Germany.

The performance is a reflection of the retailer’s ongoing work in developing its digital and ecommerce platforms as part of its #FORWARDBEAUTY strategy. Developments include:

  • Launch of a new app offering augmented reality functionalities such as the Beauty Mirror, enabling customers to try on virtual make-up looks
  • Roll out of an online beauty appointment booking service
  • Revamped online platform to boost customer experience
  • Launch of an online marketplace, enabling Douglas customers to receive beauty products from external partners

International: positive performance across markets

Internationally, Douglas also delivered positive results across its varying markets:

  • In France, sales were up 0.9% from €451mn to €456mn compared with the same period last year, and LFL sales grew 0.7%
  • In Eastern Europe, total sales grew 9.7% to €189mn, whilst LFL sales were up 6.7%
  • In South-Western Europe, the region experienced 1.1% growth to €585mn and a 1.6% lift to LFL sales

Outlook: #FORWARDBEAUTY, services, range innovation

The retailer will continue to drive its #FORWARDBEAUTY strategy, both in-store and online.

Source: Douglas

In line with the strategy, Douglas has announced it has invested in beauty start-up Welmoa, a platform which offers on-demand beauty and wellness treatments.

Douglas’ chief marketing officer, Lucas van Eeghen, commented on the move, "As an innovative beauty player we are always on the lookout for exciting investment opportunities that are in line with our #FORWARDBEAUTY strategy.”

Douglas also aims to increase its number of brands offered to 680 by the end of FY2018/19, with focus on roll-out of premium brands.

 

Want to know more?

Retail Analysis subscribers can read and download our Douglas PRO store visit report here.

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