Edeka, Germany’s largest retailer, said today (28 April) that it will invest in the expansion of its store network over the next two years.
The firm this morning booked a 14.9% increase in 2009 sales, boosted by the merger of discount arm Netto with Tengelmann’s Plus in 2008.
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Edeka said today that 1,900 of the acquired stores have since been transformed into Netto stores, with 400 to be completed by the end of the summer.
As well as the remodelling programme, Edeka also announced it will be investing EUR1.3bn in its business this year.
Alexander Lüders, a spokesperson for Edeka, told just-food: “The investment will be spent in two parts. The first is an expansion of our networks, organic growth of new market stores. We are opening 500 new stores – 200 under Edeko and 300 under Netto.
“This is an ongoing process that we are working on now and will continue through 2010. It is also one of our main targets for 2011 and beyond,” he added.
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By GlobalDataFor the 12-month period, Edeka’s total sales reached EUR42.1bn from EUR36.6m in the prior year. Retail sales increased 18.7% to EUR38bn, while like-for-like sales reached EUR10bn from EUR4.2bn in 2008.
Lüders added that competition in Germany had become “very intense”. German retail giant Rewe this month booked a 2.7% rise in first-quarter turnover, while Metro Group said it expects to see a “tangible” increase in profits in the coming year.
“Competition is definitely very intense and is going to be more so when we look into 2010. It’s very competitive and this will continue for the remainder of the year,” Lüders told just-food.
“Consumers in Germany are very focused on prices. When you take a look at private label, we have recognised that the consumers are very open for private labels and they are still very sensitive towards prices. We expect this to continue,” he added.
