German retailer Rewe has decided to stop trading under the Penny banner in western Austria.

The retailer will convert its Penny discount outlets in Tyrol and Vorarlberg into Billa supermarkets, it said.

A spokesperson for the retail giant told just-food today (10 October) it has handed ten Penny stores to its Billa chain in the region amid an “optimisation” of Penny’s store network.

“The reason is the following: in Tyrol Penny was active with seven stores, which is a relatively small number,” the spokesperson told just-food. “Especially if you consider that we have to afford promotional marketing measures for such a little number of locations.

“We had two options: either to further expand or to hand over some stores. Due to the fact that Penny is not that well-known in the western part of Austria we decided to focus on those stores, which are well accepted and very successful.”

Rewe operates around 290 Penny stores across Austria. The spokesperson said it will remain active in regions from Salzburg to Burgenland but could return to western Austria in the future.

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The spokesperson added: “If there are suitable locations, Penny will open new stores.”