ANNUAL REPORT 2004 - REWE Group

34
In July of 2004, Rewe Group began to enter the Russian
market. In the framework of a joint venture with the
Moscow-based Marta Group, a new supermarket chain is
to be established in the Russian Federation. The two
parent companies will invest a joint sum of a half a billion
dollars in this project over the next three to five years.
Seventeen Billa supermarkets have already been opened.
The stores offer a comprehensive assortment of foods on
sales floors of up to 2,500 square metres. Rewe reckons
with good growth opportunities for its Billa supermarkets
as high-quality neighbourhood stores, particularly
with growing competition from other sales formats
and from national and international competitors on the
Russian market.
Despite its present dynamism, Rewe will continue
to pursue growth outside Germany with moderation.
Foreign markets are by no means homogenous; each
country has its own business and market framework. In
countries where Rewe is already present, the firm will
strive to achieve a position among the top local players.
From the standpoint of Rewe, it makes little sense to
invest in countries and sales lines where this cannot be
achieved. The strategy is not about market presence only
- Rewe wants to create value with its investments.
With this in mind, the international Penny discount store
brand and the international Billa supermarket brand will
both play key roles. In four European countries, Rewe
operates 587 of these stores, which increased their turnover
in 2004 by 7.5 per cent to 1.8 billion euros. In
Hungary and the Czech Republic, Penny is the leader
in the discount store segment. The discounter is also
showing promising growth in Italy, with a rise in turnover
of over 13 per cent. Rewe is also operating the
XXL Mega discount store chain in Romania with
considerable success.