Germany's market leader Edeka has seen its sales increase 2.5% to €49.6bn in 2016. It opened 132 new stores throughout the year.
Independent merchants driving growth
The retailer, which has 4,000 independent merchants, saw a sales increase from them of 3.8% in 2016 (3.2% on a like for like basis). Between them, they operate around 5,900 stores and are successfully creating new and exciting shopping experiences for customers. They generated revenues of €25.2bn for the group, over half of Edeka's total sales.
Private label performed well for Edeka in 2016, with 250 new products launched during the year. These were designed to reflect the changing consumer preferences and requirements and include gluten free and lactose free products, as well as a number of organic products.
Netto sees strong sales growth
Sales for the discount format were €12.7bn, up 2.6% from 2015. It started investment in a nationwide implementation of its new store concept in 2016, focusing on creating a modern shop design. It has made the colour schemes clearer throughout the store and redesigned the layout to better suit shoppers. Netto has been testing new concepts in Hamburg and Regensburg and will now look to roll out successful elements from those. Over the next five years, it plans to invest several million euros in expanding and improving the estate, which currently consists of around 4,170 stores.
In 2017 alone, it plans to spend €100 million on refreshing existing stores as well as opening new stores. It also wants to expand some of its existing stores, taking the average size from 750sqm up to 1,000sqm. This will allow it to offer more products and increase the turnover of each store.
Plans for 2017
Edeka plans to invest €1.9bn in improving the infrastructure across its store estate in 2017. This is an increase on the €1.5bn it spent in 2016. It will also undertake the integration of 335 Kaiser stores into the group, with the stores being converted to contemporary Edeka store concepts. The takeover package also includes Bringmeister, an online delivery company which currently operates in Berlin and Munich. This creates opportunities for Edeka to learn from a specialist in the channel, drawing on Bringmeisters experience and applying this to developing its own online business.
Another focus for the upcoming year is the development of its partnership with Budni, a drugstore chain based in Hamburg. The two signed a long-term partnership agreement in February and Edeka plans to use the partnership to strengthen its offer in the drugstore channel.