Rewe will invest 1.5 billion euros in the modernization of stores
The investment decision also shows the German owners' confidence in the Austrian location, said Haraszti. The supervisory board of the German Rewe Group gave the green light for the investment package last week. For the construction of the new dry goods warehouse on the premises of the company headquarters in Wiener Neudorf (Mödling district), Rewe is using already existing developed areas. The construction start for the new logistics center is planned for 2026 and completion is targeted for 2030. With an investment volume of 600 million euros, it is the largest infrastructure project in the company's history in Austria and the largest investment by a private company in recent years in Lower Austria.
ECHR Complaint Due to Record Cartel Fine in Preparation
The record cartel fine of 70 million euros imposed by the Supreme Court (OGH) as the cartel court in February played no role in the 1.5 billion euro investment decision, according to Rewe Austria's CEO Haraszti. The reason for the fine was the failure to timely report a business space acquisition in Wels to the Federal Competition Authority (BWB). Rewe is currently preparing an individual complaint to the European Court of Human Rights (ECHR) due to the record fine, as it sees several rights being violated. The fine, which has already been paid, has no impact on the company's strategy and does not need to be "absorbed by employees and customers," emphasized the Billa/Bipa CEO. However, the OGH decision generally has "negative consequences for the business location in Austria" because legal certainty is decreasing. It is also "annoying" when online retail companies are "significantly less" regulated and can expand their business in Europe.
Despite the ongoing recession in Austria and weak private consumption, the retail group is "very satisfied" with the business performance in 2024. Rewe increased its gross total sales in Austria last year with Billa, Billa Plus, Bipa, Adeg, Penny, and Rewe Austria Touristik by 4.8 percent to 10.94 billion euros. The promotion share at Billa and Billa Plus was around 40 percent, and the private label share was 32 percent. At the end of 2024, the retail group employed over 46,900 employees in around 2,500 branches in Austria. The food business grew by 3.9 percent, and revenues at Bipa increased by 5.9 percent. In comparison, the inflation measured by Statistics Austria was 2.9 percent last year, and food and non-alcoholic beverages became 2.6 percent more expensive. According to its own information, the range price increase at Billa was around 2.1 percent. For the current year, the Rewe Austria CEO expects "no high price increases" for food. Price jumps are only expected for coffee, chocolate/cocoa, and orange juice due to poor harvests.
In online retail, sales of Billa and Bipa increased by 11 percent to 114 million in 2024. Last December, Billa discontinued nationwide home delivery outside the greater Vienna area after nine years for economic reasons. Since then, its own delivery service is only available in Vienna and parts of Lower Austria and Burgenland. According to its own information, Billa is the market leader in online grocery retail in Austria. However, the retail group has expanded the Click & Collect business and the cooperation with the delivery service Foodora.
Billa/Bipa CEO: "Market Shares Can Make You Poor"
Rewe lost its market leadership in the Corona year 2020 for the first time in decades to competitor Spar, and since then the gap has been widening. In 2024, Spar increased its market share in the Austrian grocery trade by 0.1 percentage points to 36.9 percent. Rewe lost 0.3 percentage points last year, dropping to 33.6 percent, as reported by the online trade magazine "Key Account" with reference to NielsenIQ data. The Rewe Austria CEO stated that they are focusing on "sustainable and qualitative growth." "Market shares can make you poor, especially if you buy them with promotions." The retail group wants to focus on modernizing existing spaces. Last year, they reduced the number of Billa locations by six, according to Haraszti.
By 2030, around 200 Billa supermarkets are to be managed by independent merchants, announced the retail manager as a new target. Since 2022, the "merchant model" has been implemented at 23 locations. Billa originally intended to have around 100 branches managed by independent merchants by the end of 2026. Quality takes precedence over speed, explained Haraszti regarding the somewhat slower progress. The Billa merchant holds 80 percent of the open company (OG) and Billa 20 percent. Currently, there are around 1,200 Billa and Billa Plus branches in Austria. The Billa "merchant model" has no impact on the Adeg merchants. "Adeg remains," emphasized the Rewe Austria CEO.
580 Municipalities in Austria Without Local Suppliers
The Billa/Bipa CEO positively evaluates the liberalization of store opening hours for self-service shops announced by the new government. "Local suppliers that are operated entirely digitally or digitally during off-peak times without employed staff will be exempt from the opening hours law," states the government program. According to a decision by the Constitutional Court (VfGH), local supplier containers without employees are currently only allowed to remain open as long as supermarkets. Billa has been experimenting with self-service boxes for several years. In a Billa Box (50 square meters) with a self-service checkout, there are around 1,000 items. A box is being tested in Wiener Neudorf opposite the Rewe International Group branch and in Vösendorf. Another Billa Box will open in the coming weeks at the distribution circle in Vienna-Favoriten. Haraszti is pushing for the government to quickly implement the opening hours initiative. How many Billa Boxes the supermarket chain will then set up across Austria still needs to be determined. Billa wants to engage in discussions with the approximately 580 municipalities in Austria that currently have no local supplier.
(APA/Red.)
This article has been automatically translated, read the original article here.