German distribution group Rewe has seen its sales shoot up by more than 20 % last year. Gross profit rose as well, despite major losses in the group’s travel division.
Biggest turnover ever
Rewe experienced a record-breaking year in 2020: the supermarket group saw sales increase by 20.4 % to 75.3 billion euros. In its German home market, sales increased by 12 % to 26.5 billion euros. This increase was mainly thanks to independent Rewe franchisees who, on average, sold well over 20 % more.
The acquisition of wholesaler Lekkerland boosted the figures by almost 13 billion euros. Growth abroad, however, was much slower: the group’s Eastern European stores only recorded a 2.4 % increase in sales, reaching 10.4 billion euros. Austria accounted for a growth of 4.3 %. Discount chain Penny contributed 13.8 billion euros in sales, with a 5.4 % increase in sales in the German market and an 8.3 % growth in other European countries.
Compensating for travel disaster
Thanks to the strong performance in food retail, the group’s margins managed to stay positive and compensate for the company’s travel division, whose sales plummeted by 73.9 % to 1.3 billion euros as a result of the pandemic. Although EBITDA rose by 34 % to 1.2 billion euros – due to non-compensable losses at DER Touristik – the final net profit still fell by almost 20 % to 415 million euros.
For 2021, Rewe is counting mainly on Lekkerland, which offers “excellent future perspectives in the growing convenience business in Germany and Europe”, according to CEO Lionel Souque. The group also plans to invest even more in modernising its stores, expanding its logistics infrastructure and digitisation. In 2020, the Germans invested about 1.9 billion euros. For 2021, 2022 and 2023, this will rise to 2.3 billion euros.
