Why discounter Penny doubles its prices

A store of German retailer Penny
Photo: Rewe Group

Food in supermarkets is too cheap: a message that you would expect from farmers or fairtrade organisations, but this time it comes from German discounter Penny. A lot of food products would cost twice as much if the damage to the environment is included, and the retailer therefore doubles some of its prices.


Show costs of consumption

A kilo of ground beef should cost more than 20 euros and a litre of milk 1.75 euros: more than double as much as they do now. That is, at least, when you calculate the "true costs", including the damage to the environment (carbon and nitrogen emissions, the energy used, the consequences of over-fertilisation and so on). The University of Augsburg calculated that "true cost" for sixteen private label products sold by the German discounter belonging to the Rewe group. The chain will now display those prices in its new, sustainable store in Berlin's Spandau district.


Penny wants to make its customers more aware of the consequences of their consumption by confronting them with the huge differences in price: Gouda cheese should be 88 % more expensive than it is, mozzarella 52 %. The differences are smaller when it comes to fruit and vegetables, with a 19 % price hike for bananas, 12 % for tomatoes and 8 % for apples. For organic products the difference is smaller as well, but even then organic meat would have to become 126 % more expensive to include all hidden costs.


"We have to make clear the true costs of consumption", Rewe's CEO Stefan Magel says: only then consumers can be truly informed while shopping. "As a company in a very competitive market, we certainly are a part of the problem", he admits. However, by displaying this "true price", he hopes to start paving the way towards a solution. Just to be clear, customers do not need to pay that "true price".


Twenty initiatives towards sustainability

This initiative is just one of the twenty that Penny implements in its new Berlin store, along with a focus on bees. The store has a bee hotel, but it also wants to educate customers with questions like "Which products would we still be able to offer without bees to pollinate flowers" - as well as "How can I sort the products in my fridge so that food remains fresh for longer?".


The fruit and vegetable department offers 'imperfect' items as statement against food waste, while 'Respeggt' eggs come with the promise that no mail chicks were killed in the production line. Cleaning products come in recycled packaging, and dairy labels make customers aware that the products can be safely used after the mentioned date - using the advice "Smell. Taste. Enjoy.". Customers can donate a small amount to a local charity for to help children. "Sustainability is becoming a more important factor when choosing a store", the CEO explains the cause of action.