Germany's Rewe Group has posted a 6.7% increase in revenue, to €57.8 billion, with its retail arm, Rewe Combine, posting an 8.3% increase, to €49.4 billion, the company has announced.
Rewe Combine saw sales rise by 9.5% in Germany and 5.7% overseas, however, this was boosted by the takeover of former Kaiser's Tengelmann branches in Berlin, Bavaria and North Rhine-Westphalia, and the formation of Supermärkte Nord Vertriebs GmbH & Co. KG (SuNo).
If special items are excluded, Rewe Combine posted a revenue increase of 4.4%.
Organic Growth
Commenting on the group's performance, Lionel Souque, CEO of Rewe Group, said, "What’s particularly gratifying is that we didn’t achieve this increase in revenue solely through the takeover of Kaiser’s Tengelmann branches [...] through the founding of Supermärkte Nord Vertriebs GmbH & Co. KG, and through the consolidation of the newly established joint venture with Rewe Dortmund eG.
"Rather, the group also grew very strongly through organic growth. In the highly competitive German food retail sector, Rewe achieved the strongest revenue increase in the supermarket sector, even without including the acquired branches. Penny was able to improve further on its revenue increase achieved in 2016," added Souque.
The CEO also reserved praise for Rewe's network of independent retailers, which achieved a revenue increase of 8.5% for the period.
“The stores of our Rewe independent retailers are an important driver of our growth," he said. "The promotion of independent retail is not only part of our cooperative philosophy, it also contributes decisively to the positive economic development of the entire company.”
Behind The Numbers
The EBITA of Rewe Combine, excluding special items, was €594 million – an increase of around €20 million on the previous year. This figure does not include the EBITA of Rewe's independent network, which amounted to €290 million for the period.
In Germany, the group's full-range national store banners, including Rewe, Rewe Center, Rewe City, Rewe To Go, Nahkauf and other wholesale partners, posted a revenue increase of 15.4%, to €21.2 billion.
It added that it increased its forecourt presence in cooperation with Aral to 236 outlets at year end, and also expanded its Rewe Lieferservice online delivery service to 75 German cities.
The group noted that 'significant factors' contributing to its home-market performance included 'further improved price positioning, the strengthening of regional and local products, [and] convenience and organic products in the range, as well as store brands'.
Internationally, its full-range stores posted a revenue increase of 3.8% (if adjusted for currency effects), to €8.9 billion.
Revenue in Austria, where Rewe operates the Billa, Bipa, Merkur and Adeg banners, rose by 1.4%, to €6.3 billion. In Central and Eastern Europe, its Billa banner posted an increase of 10.4%, if adjusted for currency effects, to €2.6 billion.
Rewe's discount arm, Penny, posted a 2.5% increase, to €7.4 billion, in Germany, while Penny International generated revenue of €4.5 billion – a 4.8% increase if adjusted for currency effects.
Future Plans
Looking ahead, Souque said that he felt that Rewe Group was "well equipped for the challenges ahead. Due to the takeover of the Kaiser’s Tengelmann branches and the need for renovation at Sky, we have a temporary charge against earnings, but by investing and modernising here, we are significantly improving our competitive position. We will continue on this path.
"With our high investments, which we have also planned beyond 2018, we want to significantly increase the speed of our profitable revenue growth," he added.
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: European Supermarket Magazine.
