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Global Economy

Rewe emulates Aldi and Lidl

Rewe wants to intensify its business abroad. "The Rewe Group will expand its international business significantly over the next few years and spend significantly more money on it than in previous years," said Jan Kunath, Deputy Chairman of the Rewe Group responsible for international business, to the news agency dpa. According to the manager, a total of around five billion euros will flow into the expansion of foreign activities in the food trade from 2021 to 2025.

In addition to Germany, the Rewe Group is currently also present in Austria, the Czech Republic, Slovakia, Italy, Bulgaria, Romania, Hungary, Croatia and Lithuania – above all with Billa supermarkets and the Penny discount chain. "I would rule out going to other countries at the moment. There are no white spots anymore," said Kunath. However, if an opportunity arises to obtain an attractive market position in a Central European country through a takeover, it will certainly be looked at. In total, the group operates around 4,500 stores abroad, and by 2024 there should be 5,000.

With its plans, the Cologne group is following the expansion efforts of its German rivals. Because the home market in Germany has been considered saturated for years with a correspondingly strong competitive situation.

Active in up to 30 countries

Aldi and Lidl in particular have been focusing on far-reaching international expansion for decades. The Schwarz subsidiary Lidl, which is active in a total of 30 countries, has made the most progress. The two sister companies Aldi Nord and Aldi Süd have not only divided up Germany, but also the foreign markets, so to speak. Aldi Süd is only present in the USA under the Aldi brand and Aldi Nord under the Trader's Joe brand. Overall, Aldi is active in 21 countries.

Aldi Süd is particularly well represented in the USA, because with almost 2100 branches there are even more sales outlets than in Germany with just under 2000. The two competitors Lidl and Aldi Nord are particularly present in France with around 1500 and around 1300 branches respectively.

Discounters are German export hits

"The discount model is the biggest export success of German retail," says Frank Küver, retail expert at the market research company NielsenIQ of the dpa. "The successes of the German discounters abroad have meant that the announcement of market entry in a new country sometimes causes prices in the food trade there to slide – even before the first store is opened."

In many foreign markets, when Aldi, Lidl or Penny entered the market, the discounters' share of the entire food retail trade was relatively small, while in Germany it has traditionally been high and has been around 42 percent in recent years.

In Europe, food retailing is dominated by German groups. According to calculations by the "Lebensmittel-Zeitung", the Schwarz Group is number one with sales of almost 145 billion euros last year. Rewe is in second place, followed by Aldi. Edeka ranks fifth. The British group Tesco is the only non-German company in fourth place.

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