ANNUAL REPORT 2004 - REWE Group

12
Rewe is Growing in and with Europe.
Despite the continued poor performance of key economic
indicators - high unemployment, low consumer spending
and growing competitive pressures - 2004 was successful
for Rewe Group. Total turnover exceeded the 40-billioneuro
mark for the first time, coming in at 40.8 billion euros.
Wholesale and retailing in Germany and in 13 other
European countries, combined with Rewe's travel arm,
recorded growth of more than 1.6 billion euros (up by
4.1 per cent).
With the renewed increase in total turnover, which includes
the activities of all the business areas such as food
retailing at independent Rewe retailers and wholly owned
chain stores, specialist stores, and the travel business
domestically and abroad, Rewe managed to boost its
strength and its future-oriented position in German and
European trading. In its domestic market, the Group is
the number two among the ten largest trading groups; in
Europe it is the second-largest non-stock-market-listed
company and the number three among the top ten food
retailers. The dynamics and dimensions of its development
are especially noticeable in retrospect: just ten years
ago, the cooperative trading group turned over only
around 20 billion euros when the deutschmark figures
are converted to the new currency. Turnover in Europe
thus doubled in a decade.
In Germany, too, Rewe Group has continued to develop
positively in contrast to several of its competitors and in
contrast to the industry as a whole. Total external turnover
in the domestic market grew by 320 million
euros (up by 1.1 per cent) to 29.5 billion euros.
The group's foreign activities displayed an even greater
dynamism. Turnover in Austria, Italy, Switzerland, France,
Poland, Hungary, the Czech Republic, Slovakia, Roma-
nia, Croatia, the Ukraine, Bulgaria, and - as the latest
site of expansion - Russia grew at a total of 13 per cent
to 11.3 billion euros. The consolidated acquisition of the
Bon appétit Group (Switzerland) played the largest role
in this outcome.
The share of international business in the total turnover
for Rewe Group logically increased in comparison to the
previous year's figures by two per cent to 28 per cent. The
stated aim - aside from strengthening our position on the
German market - is to continue developing this share systematically.
In the context of a globalised trading system,
Rewe's national position of course also needs to be permanently
secured and expanded on the basis of an
increasingly international orientation and presence.
Retailing turnover in Europe was also marked by the
stormy developments of international business. To the
480 million euros (up by 1.5 per cent) of total growth to
32.7 billion euros came 220 million euros in growth for
Rewe in Germany. The latter translates into growth of
0.9 per cent to 24.2 billion euros.
This growth is all the more impressive considering the
contraction in German retailing of 1.6 per cent for 2004,
representing the third year in a row of such negative figures.
The number of Rewe Group retail stores and travel
agents in Europe increased by a net of 173 (up by 1.5 per
cent) to 11,665 locations. Yet the targeted structural
adjustments intended to promote competitive strength in
Europe - but especially in Germany - is not yet complete.
Profitability and the future viability are absolute priorities
ahead of expansion at all costs. Over the past year,
100 new own-chain locations were opened, but 230
others were closed because they were outdated and therefore
no longer accepted by customers. Rewe operates
8,703 retail stores throughout Germany. The increase by