Rewe - International Housewares Association

Key Retailer Report Zentral AG Following their slogan “every day a little better”, the primary aim of the REWE Group is to become better: better than the competition, and above all, better in the eyes of the customer. Therefore, their business focus is primarily oriented towards consumers’ wants and needs. Corporate website: www.rewe.de Consumer website: www.rewe-group.com

Contact Information (buying office) REWE-Zentral AG Humboldtstraße 142 51149 Cologne Germany Fax: +49-221-1499360 Home / housewares category buyer 4 Heike Wollersheim, Buyer Small Electrical Appliances Tel: +49-221-1490 Email: [email protected]

Home / housewares category buyer 1 Alwin Ficke, Head of Nonfood Buying Tel: +49-221-1493600 Email: [email protected] Home / housewares category buyer 2 Julanta Piwlowski, Buyer Cookware and Plastics Tel: +49-221-1490 Email: [email protected]

Home / housewares category buyer 5 Olav Karschoeldgen, Buyer Kitchen Accessories Tel: +49-221-1490 Email: [email protected]

Home / housewares category buyer 3 Juergen Wyborny, Buyer Glass/Porcelain Tel: +49-221-1490 Email: [email protected]

Background Information Year Established: 1927 Number of Stores: 11,907 Total Annual Sales (US$): 58 billion Type of Store: Supermarkets, Hypermarkets, Discounters, DIY-Markets, Electro-Markets Average Store Size: 800 m² (Supermarkets, Discounters) – 3000 m² (Hypermarkets)

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Store Locations: Germany 8,939 International (Rewe Group Foreign Activities 2006): Country Austria Bulgaria Croatia Czech Republic Hungary Italy Poland Romania Russia Slovakia Ukraine

Store brands Billa, Merkur, Penny, Bipa Billa Billa Penny, Billa Penny, Billa Billa, Standa, Penny, Bipa Billa, Selgros Billa, Penny, XXL, Selgros Billa Billa Billa

Number of stores 1,901 22 50 245 158 377 33 65 21 87 9

Turnover (Million €) 4,618 138 215 844 443 1,736 679 1,050 128 274 68

Housewares Percentage of

– Total Sales: 2% – Total Square Meters: 2% Position within the Market: 2nd largest retailer in Germany, 3rd largest retailer in Europe, number 7 in the world. Target Consumer: Depending on the market, every income level is targeted.

Stores and Products Store Layout / Look / Feel: Typical markets in all categories; nice, clean and friendly. Home / Housewares Product Categories: All Pricing Strategy: Discounters low (not extremely), other stores mid to high Quality / Design / Branding Strategy: Mid to high quality, good design, brands are appreciated, but also private label is very strong. Company Brands Sold: Kaiser, Ballarini, Lurch, Rastal Private Label Brands Sold: Ja!, REWE Key Marketing Tools & Promotions: TV, radio, direct mailings, advertising flyers

Suppliers and Sourcing Sourcing Strategies

– Global – Direct from Factories – Direct from Vendors / Product Suppliers – Through Distributors

Supplier Expectations Regarding

– Products: Good quality – Pricing: Low to mid price range – Promotions: Promotions help but are not required

Expansion Plans and Expectations No specific plans available. However, internationalization is a key factor; the foreign share of REWE’s total turnover is forecasted to be increased to over 50% by year 2015. Market Expectations for Next Three Years: A decent market growth is expected that will enable REWE to increase their turnover growth from 2 to 5% within the next years.

Report prepared by: IHA Germany Office Michael Pfeiffer, MP O MC Tel. +49-6172-285949, E-Mail: [email protected] www.mp-mc.de

Country Profile: GERMANY Home & Housewares Market The value of the home & housewares retail market: € 10,2 billion After three rather weak years, all sectors within the housewares retail market show positive growth between 10% - 25% in 2006, depending on the category.* (German Federal Statistics Department)

The structure and state of the home & housewares retail market: Discounters are getting stronger every year. Another fast growing sector are the furniture retailers, who sell more and more housewares in their so-called boutiques. Only major specialty chains that belong to one of the major retail organizations in Germany can still show good growth. Individual specialty retailers are trying to survive by providing only the highest quality in product and service. However, there are not a lot of these retailers left. Discounters and also major supermarkets and hypermarkets are selling almost only through aggressive price strategies – which means that also the overall quality of the average product becomes lower. However, some of the hypermarket chains are trying to leave this strategy and want to supply better quality products and more novelties to their customers. Differentiation is very important to them and this provides good opportunities for international suppliers.

Key Retailers Department Stores:

Kaufhof, Karstadt, Woolworth

Discounters:

Lidl, Aldi, Tchibo, Norma, Penny

Supermarkets:

Rewe, Edeka, Tengelmann, Plus, Spar, Tegut

Hypermarkets:

Real, Toom, Kaufland, Globus

Wholesale Clubs:

Metro C+C, Fegro

Electro-Superstores:

Saturn, Media Markt, Promarkt

Report prepared by: IHA Germany Office Michael Pfeiffer, MP O MC Tel. +49-6172-285949, E-Mail: [email protected] www.mp-mc.de