With c-store sales booming across Europe, Rewe Group's purchase of convenience wholesaler Lekkerland is a masterstroke that puts the Cologne-based retailer in a premium position when it comes to growing this important category.
The announcement this week that Rewe is to buy Lekkerland, which services around 91,000 points of sale in seven European countries, took the market by surprise somewhat, but for Lionel Souque, Rewe CEO, and his team, it gives the business a strong foothold with which to grow its food-to-go operations.
On-The-Go Consumption
Indeed, in his statement on the deal, Souque cited the growing importance of on-the-go consumption, which he said is one of the "strongest trends in our industry and will play an even more important role in the future.
"The combination of this with Lekkerland's specialised logistics and comprehensive wholesale and convenience expertise is a convincing recipe for success for the future in an important segment of the food market," he added.
In full-year 2018, Rewe's National store portfolio, which includes the Rewe to Go convenience operation as well as its standard supermarkets, posted a 12.3% increase in turnover to €23.8 billion.
The division has also sought to consolidate around the Rewe brand identity, with the ongoing conversion of former Sky stores to the Rewe banner, which is due to be completed in the middle of this year.
As well as the Rewe brand, however, the firm also operates the Billa, Bipa, Merkur and Adeg banners in Austria, as well as supermarket and drugstore banners in Austria, the Czech Republic, Slovakia, Russia, Bulgaria, Croatia, Lithuania and the Ukraine.
Its Penny discount brand also operates in Germany, Italy, Austria, Hungary, Romania and the Czech Republic.
Geographical reach is also a strong point of the Lekkerland brand, which holds operations in Belgium, Luxembourg, the Netherlands, Austria, Switzerland and Spain, as well as its native Germany.
By purchasing the business, Rewe has therefore cast its net into territories it heretofore did not have a presence in, however with the deal subject to competition approval, there may be divestments on the horizon in some markets.
Additional Tools
Lekkerland has recently been working on the development of an online platform to enable its customers to track delivery times and report delays, a tool that will no doubt also help boost Rewe's logsitics capabilities – the retailer expressed the need to 'promote independent retailing' in its most recent full-year report.
Lekkerland has also been developing a new concept for the convenience sector, Frischwerk, in which the group provides the store design, interior styling, range selection and marketing for convenience stores – again a tool that Souque and his team may look to expand further.
Lekkerland's posted sales of €12.4 billion last year, which was down forma he €12.8 billion the group posted the previous year, due to the 'departure of a large customer in Germany', the group said.
It is not known at this stage whether the 'departure' of this customer is related to Rewe's swoop for the business.
Alignment
"We as a wholesaler and Rewe with its goods and retail expertise have over 150 years of experience together," Lekkerland's Patrick Steppe commented at the announcement of the takeover.
"Not least because of our respective corporate values, we think and act in a very similar way, albeit at different stages of sales," he added.
That alignment could prove crucial in the coming years, as Rewe flexes its muscles in the growing convenience sector.
© 2019 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine.
