Germany-based Rewe Group announced revenues rose 4.7% to €61.2bn. Its performance was driven by growth both in its home market, where revenues increased by 4.5%, and internationally, where they rose by 5.2%.
“REWE Group is on a healthy growth trajectory, both nationally and internationally. In 2018, we once again profited from our huge investments made in previous years in the modernisation and expansion of our stores and in strengthening our Travel and Tourism division, both in Germany and in other European countries."
Independent food retail drives growth
Rewe said that while its performance was positive across its business units, the independent food retail business ‘was a driver of the positive overall development’. The group said its retailers had increased sales by 9.1% in 2018, which followed growth of 8.5% in 2017. The figures were aided by a 5.1% increase in the number of stores of Rewe retailer in Germany, which reached 1,718 at the end of 2018.
Discussing the performance, Rewe Group’s chief executive, Lionel Souque, noted the importance of its retailers ‘being local enterprises with roots in their respective towns and communities, high customer proximity, regional and local product ranges, as well as individual service.’ The continued success of its operating model is encouraging Rewe to maintain its focus on its independent retailers and its expansion within the area.
Supermarkets performing well in Germany and internationally
Rewe said its national full-range stores, which includes the Rewe, Rewe Center and Rewe to Go banners, amongst others, had achieved revenue growth of 12.3%, to €23.8bn, in 2018. It noted the success of its Rewe 2020 store concept and its focus on providing shoppers with ‘freshness, regionality, healthy diets, variety, innovation and expert assistance’.
Outside of Germany, its supermarkets and drugstores saw revenue growth of 6.2%, to €9.4bn. In Austria it saw revenues increase by 1.7% to €6.4bn, while in Central and Eastern Europe revenues rose by 17%. The strong growth was aided by the consolidation of the Lithuania-based Iki business for the first time and the performance of its Czech Republic-based operations, which grew revenues by 12%, to €1.1bn.
Discount remains in positive position
In Germany Rewe’s Penny discount format continued to perform positively, with revenues rising by 3.1% to €7.6bn from its 2,182 stores. Rewe said the growth was driven by ‘the consistent positioning of Penny as a neighbourhood discounter, the expansion of the organic and convenience ranges, as well as the introduction of Payback’.
Outside of its home market, Rewe said Penny had enjoyed revenue growth of 7.5%, taking its sales to €4.8bn. With its store numbers rising by 2.7%, to 1,505, the assumption is that like-for-like growth was strong across its various geographies. Rewe highlighted Romania, where revenues rose by 14.6%, and Austria, where they were up by 2.5%.
Retail Analysis weekly newsletter