Retail: Rewe: Price conflicts with manufacturers continue

In the food trade, the price war between retailers and brand manufacturers continues.

Retail: Rewe: Price conflicts with manufacturers continue

In the food trade, the price war between retailers and brand manufacturers continues. "There are still a lot of price increases," said Rewe purchasing manager Hans-Jürgen Moog on Tuesday at the presentation of the Rewe Group's annual balance sheet. In some cases, the level of the price demands is incomprehensible to the dealer. However, the conflicts are no longer quite as bitter as they were a few months ago, so that there are no longer gaps on the shelves.

Rewe boss Lionel Souque expects that the price increases in the supermarkets in the coming months will not be quite as high as last year. Prices for some raw materials such as sunflower oil or wheat have already fallen significantly again, while for others such as sugar or rice they remain at a high level. Sometimes it will take a little while for the lower wholesale prices to reach customers because of long-term contracts.

Last year, the Cologne retail giant increased its sales by 10.4 percent to almost 85 billion euros. Much of the growth is due to inflation, Souque said. The group also benefited from the fact that the tourism business recovered after the dramatic losses during the pandemic.

Travel division splendidly recovered

Sales in the travel division, which includes brands such as Dertour, ITS, Kuoni and Jahn-Reisen, were EUR 5.7 billion in 2022, more than twice as high as in Corona year 2021 and thus returned to the pre-pandemic level. After a loss of around 400 million euros in 2020 and 200 million euros in 2021, the tourism division wrote a "red zero" again last year and is expected to return to profitability this year.

From the company's point of view, the development in the food trade was not quite as positive. In Germany, for example, sales in this area rose by 6.8 percent to 37.8 billion euros. The growth was therefore lower than the price increase.

Profits were also down. The annual profit of the Rewe Group - ie without the independent Rewe dealers included in the figures of the Rewe Group and without associated companies - was 503.5 million euros, a third below the previous year's level.

One reason is that the group has not fully passed on the cost increases in energy, raw materials, personnel and logistics to its customers, emphasized Souque. "In 2022 we did not leave our customers standing in the rain of inflation without an umbrella."

In Germany alone, the company has invested a three-digit million amount to keep the price jumps within limits. The price increases on the Rewe shelves in 2022 would have been 7.3 percent, well below the 13.4 percent inflation for food determined by the Federal Statistical Office. However, Souque also emphasized that such cushioning of inflation-related developments would only be possible for Rewe temporarily.

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