ANNUAL REPORT 2004 - REWE Group

ANNUAL REPORT 

2004

Contents. 

REWE Group at a Glance 

Structure of the REWE Group 

Profile of the REWE Group 

Foreword by the Chairman of the Supervisory Board 

Report of the Management Board 

Management Board, Supervisory Board, Executive Committee 

Development of the REWE Group 

Food Retailing 

Wholesale 

Specialist Stores 

REWE Travel and Tourism 

Foreign Activities 

Employees 

REWE Milestones 

Financial Statements: 

REWE-Zentralfinanz eG 

Management Report 2004 

Balance Sheet, Profit and Loss Account, Notes 

Report of the Supervisory Board 

REWE-Zentral-Aktiengesellschaft 

Group Management Report and Management Report 2004 

Balance Sheet, Profit and Loss Account, Notes 

Report of the Supervisory Board 

Group Balance Sheet, Group Profit and Loss Account 

Front cover 

Front cover 

Front cover 

REWE Group Sales Structure Back cover 

4 

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92 

94

4 

We Have Now Completed 

the Necessary Revitalisation. 

The past fiscal year has been very special for Rewe in 

many ways: 2004 was to become one of the most successful 

years in the firm's history. With a turnover from 

independent Rewe retailers and our subsidiaries in 

Germany and abroad totalling 41 billion euros and with 

profits matching those of the previous year, the Group 

completed the year better than planned. 

The past twelve months were not only a success for us all, 

however, they were also rough and moving. Reflecting on 

the year makes it clear that we are now at the end of a 

transformative phase. Rewe today is certainly not a completely 

different company, but the firm has undergone 

deep changes. This was brought about by several events, 

yet this transformation itself was a necessary - almost 

natural - revitalisation process. 

As the CEO, Hans Reischl led Rewe for nearly a 

quarter of a century, leaving his mark on the company. 

Under his leadership, the Group became one of the 

most important European trading and travel companies - 

with dynamic growth and solid results. The Supervisory 

Board and everyone at Rewe is indebted to Mr. Reischl 

for this achievement. The appointment of Dr. E. Dieter 

Berninghaus as CEO was supposed to usher in the transi- 

tion to a new generation of senior management at the 

company. But the poor health of the new CEO and his 

still uncertain role in an investment decision that went 

badly for Rewe soon put an end to the enthusiastic expectations. 

The employment contract with Dr. E. Dieter Berninghaus 

was dissolved. Fortunately, the remaining three 

members of the Management Board still managed to 

handle the 

wide-ranging tasks of running the company quite well. 

We have had a complete Management Board with a 

Chief Executive Officer again for several weeks now. 

The transition to a new generation of senior managers is 

complete; the necessary continuity in company leadership 

was never in jeopardy. The new Management Board is a 

healthy mixture of two "seasoned veterans" who have 

held positions of high responsibility at Rewe for years 

and two younger managers with international experience 

who have a lot of new ideas to offer us. 

Of course, we were not only engaged in solving personnel 

issues in 2004. On the contrary: key decisions fundamental 

to the future of the company were taken and implemented. 

Of these, the first to mention dealt with modernising 

the aging corporate structure of Rewe. Much of the

original structure was no longer compatible with the 

principles of transparent organisation and modern management. 

We untangled the knots and established a set of 

corporate governance principles for our company. Today, 

the ownership structures are once again commensurate 

with the voting majorities on the governing boards. 

In contrast to a joint stock company with shareholders, 

the merchants who in effect own Rewe are not primarily 

interested in the highest possible dividend payments. 

They are all entrepreneurs in their own right - in business 

for themselves and their families, but also for the whole 

of the company in which they are cooperative members. 

They know Rewe's business, they are interested in the 

long-term stability of the company, and thus in its performance 

abilities for the future. 

Rewe traditionally makes a great effort to promote medium-sized 

business people and to secure their viability. 

This concept also includes managing the Rewe Deutscher 

Supermarkt Kommanditgesellschaft auf Aktien with its 

different sales lines and marketing possibilities. With the 

apparent tendency these days of noisily criticising all aspects 

of capitalism, it is worth emphasising the fact that 

we have no intention of departing from this traditional 

course. Responsibility and the entrepreneurial spirit, 

FOREWORD OF THE CHAIRMAN OF THE SUPERVISORY BOARD 

z Dr. Klaus Burghard, 

Chairman of the Rewe Supervisory Board 

based squarely on mutual security and on using Group 

synergies, are the cornerstones of future success. I am 

confident that this form of cooperative company and its 

entrepreneurial culture have lost none of their strengths. 

Rewe Group combines traditional cooperative structures 

with modern trading and corporate strategies on a national 

and international scale in a way no other firm can. 

Rewe's operative business was never in disarray. 

For me, this is proof of the solidarity that has always 

characterised this Group. On the other hand, it is emblematic 

for the sense of responsibility and for the expertise 

of our staff and employees. And for this I am deeply 

grateful to everyone who has made this contribution to 

Rewe's vitality. 

5

6 

The Primary Aim is to 

Strengthen Earning Power. 

Rewe Group achieved good results last year once again - 

and in contrast to the general market trend. Our 200,000 

staff and employees in Germany and in13 other European 

countries focused their hard and dedicated work on attaining 

this outcome. We are grateful to them for their 

efforts. We will continue to expand our very strong position 

among the leading group of European food trading 

companies on this basis in future. 

The pressures of competition domestically and 

abroad will continue to build. Tough overall economic 

conditions, especially in our German home market, hardly 

give us cause to rest on our laurels. Every day we have 

to face the challenge of attracting and retaining new 

customers in sustainable way, both to our core food trading 

business and to our travel and tourism services. 

This is not to imply growth at any price; profitable 

growth is the only option we are willing to consider. We 

have seen again and again that it was strategically wise to 

develop new growth markets in Europe at the beginning 

of the 90s and in this context it is to mention that Rewe 

Group increased its turnover in Eastern Europe alone by 

ten per cent in the last year. We experienced the fastest 

growth rates in Romania and Bulgaria, countries that will 

become future EU member states. The country with the 

strongest turnover was the Czech Republic. We will concentrate 

our activities on these countries, where we can 

attain a top position in our industry in the medium to 

long term. 

As the Management Board of Rewe Group, we are glad 

to accept the challenges of the German market and of international 

competition. We certainly know that Rewe's 

unique culture of entrepreneurial spirit, independence 

and responsibility gives us a solid foundation to build on: 

values with decades of tradition that have lost none of 

their importance to Rewe over the years. 

We are focusing on three areas to develop this 

second-largest non-stock-market-listed European 

company internationally: 

– Securing and strengthening the earning potential of 

the overall group 

– Increasing the profile of and sharpening all sales 

concepts 

– Strengthening the efficiency and effectiveness of our 

organisation nationally and internationally. 

Once the German regulations on special offers fell in 

2001, the retail industry finally shifted its sights squarely 

to the pricing factor. Better and better specials were to 

awaken consumer interest again. But the opposite occurred: 

the hoped-for boost in sales failed to materialise. 

The margins and results simply melted away. This was a 

development that also left its mark at Rewe. We are thus 

all the more vehement in our view that even the mildest 

hint of an improving consumer climate is an opportunity 

to overcome the superstition of a turnover-oriented pricing 

policy. A results-oriented pricing policy strengthens price 

image and customer loyalty - factors without which a 

permanent improvement in performance is unthinkable. 

This is true for Germany just as much as for Europe. 

Our core competency is most easily observed in our 

marketing concepts. We have to continue to keep these 

up to date and to develop them. Our marketing formats 

are experiencing conditions of predatory competition in 

our German domestic market. Unlike the past few years, 

signs are beginning to appear that consumers are paying

more attention to quality and diversity of product range. 

Our Rewe and miniMAL supermarkets stand to profit 

from this trend. 

After all, supermarkets compete above all on quality and 

service. Two years ago, we repositioned and reorganised 

miniMAL. Last year we developed a new store concept 

for the independently operated Rewe supermarkets. We 

will continuously optimise and strengthen both types of 

supermarkets. The 120 acquired Extra sites, of which 

two-thirds are run by independent merchants and the rest 

as miniMAL stores, are giving us another boost. Even if 

they weigh down our results because of needed investments. 

For the many interesting, albeit mostly smaller, inner city 

locations, we have developed our own local provider con- 

REPORT OF THE MANAGEMENT BOARD 

z Gerd Bruse, Dr. Achim Egner (CEO), Alain Caparros, and Josef Sanktjohanser make up the Rewe Management Board. 28. April 2005 

cept. This new approach of emphasising fresh foods and 

convenience products was well received among customers, 

and it is now undergoing a comprehensive rollout. 

We are also going on the offensive with the Penny stores. 

The restructuring phase is complete. The focus now is on 

developing future-ready locations to shore up the discounter's 

number three position on the German market. 

In contrast to the developments in supermarkets, we were 

confronted with turnover loss among our large-floor-area 

stores - as were our segment competitors. We will optimise 

our concepts this year with the aim of making customers 

aware of the strengths and benefits of using such 

superstores/hypermarkets. The integration of 30 Globus 

locations will increase the presence of the national sales 

format "toom". 

7

8 

As to the question of whether to run a store as a chain 

outlet or to have it run by an independent Rewe retailer, 

we firmly believe in the paradigm of personal 

responsibility. We can best realise the highest degree of 

service quality and direct contact with customers from 

locations where employees share a sense of entrepreneurial 

thought and action. This works best with committed, 

directly employed store managers, but even more with independent 

retailers. To what extent the store formats can 

or will be evened out is not a question of ideology. The 

only yardstick is the qualification of the independent retailer 

or of the store manager along with the advantages 

of the specific location. 

Rewe Group is increasingly generating growth 

through strategic partnerships. We can point to the 

Dohle Group's move from Markant to Rewe as a case in 

point. The same holds true with the cooperation with dm, 

the market leader for specialised drugstores. Both will 

cooperate closely with Rewe in purchasing and central 

settlements, thus contributing to strengthening our position 

on the national and international procurement 

markets. 

In 2004, Rewe also entered into another cooperative 

deal with Karstadt, where Rewe will run joint foods 

departments in 70 department stores under the Karstadt 

Feinkost GmbH venture. The move helps Karstadt improve 

its own profile in an important department store 

segment, with Rewe contributing its expertise in food 

retail and wholesale. 

We have been working hard to improve the efficiency 

of our processes for years. Our organisational 

structure must become more efficient in several areas. 

Distribution of expertise, levels of hierarchy, responsibility 

and decision-taking authority along with access to 

information require regular close inspection. The organisational 

maxims at Rewe have to be in line with decisions 

taken at places where the expertise for taking them resides. 

The new Management Board at Rewe has organised 

itself to ensure clear structures and responsibilities by 

creating the offices of CEO, central services, domestic 

affairs, and international affairs. Projects on strategic 

planning, variable remuneration, process optimisation in 

purchasing and sales, human resource development, 

leadership, and branding were already launched. 

Anyone who is to bear responsibility for his or her 

actions and decisions has to know the framework in 

which these actions and decisions occur. We will create 

more transparency for each employee in this area. 

The company's senior management at all levels and in all 

areas of Rewe will spare no effort to explain and argue 

for the defined aims. Responsible action, transparency, 

clear job duties and expertise are the foundations of our 

leadership work. 

There can be no doubt that Rewe Group is well 

prepared. Despite all our successes, we have continuously 

striven to optimise all areas of the company for years. 

We will continue to pursue this course - and we will 

even accelerate the pace of change. The market requires 

it; our organisation and its people are ready to face this 

challenge.

REWE-Zentral AG 

Management Board 

Dr. Achim Egner, Chief Executive Officer 

Gerd Bruse, Chief Financial Officer 

Alain Caparros, Chief Operation Officer (International) 

Josef Sanktjohanser, Chief Operation Officer (Domestic) 

Supervisory Board 

Dr. Klaus Burghard, Chairman 

Gerhard Hilbert, Vice Chairman* 

Michael Adlhoch* 

Herbert Blank 

Roland Hofmann* 

Jürgen Hundertmark 

Stephan Keuchen* 

Karl-Hermann Krämer* 

Willi Kramer 

Uwe Meyes* 

Bruno Naumann 

Rainer Paas 

Wolfram Schmuck* 

Richard Schweinsberger 

Bärbel Tydecks 

Angelika Winter* 

(*Employee representatives) 

Executive Committee 

Dr. Achim Egner 

Chief Executive Officer, Human Resources and Legal Affairs, 

Human Resource Development, Controlling, Corporate Development/Strategy, 

Purchasing, Marketing, Auditing, Public Relations 

Gerd Bruse 

Finances, Information Technology/Logistics, Accounting/Central 

Settlements, Real Property, Travel and Tourism 

Alain Caparros 

International business, including Rewe Austria/Eurobilla, 

Discount Stores (domestic and international), Commercial 

Wholesale Customers (domestic and international), Cash&Carry 

(domestic and international) 

REWE-Zentralfinanz eG 

Management Board 

REWE HEAD OFFICE DIVISIONS 

Management Board, Supervisory Board 

and Executive Committee. 

Dr. Achim Egner, Chief Executive Officer 

Gerd Bruse, Chief Financial Officer 

Alain Caparros, Chief Operation Officer (International) 

Josef Sanktjohanser, Chief Operation Officer (Domestic) 

Supervisory Board 

Dr. Klaus Burghard, Chairman 

Herbert Blank, Secretary 

Jürgen Hundertmark 

Willi Kramer 

Bruno Naumann 

Rainer Paas 

Richard Schweinsberger 

Bärbel Tydecks 

Josef Sanktjohanser 

Wholesale, Domestic Full-Range Stores (independent 

retailers/chain stores), Hypermarkets, Specialist Stores (toom 

BauMarkt/ProMarkt), Construction 

Dr. Stephan Fanderl, Supermarkets international 

Erich König, Information Technology, Logistics 

Reinhard Schürk, Controlling 

Klaus Trück, Finances 

Rüdiger Winkler, Human Resources and Legal Affairs 

As at May 2005 

9

"I can go shopping all by myself. 

But only at Rewe, mum said."

DEVELOPMENT OF REWE GROUP

12 

Rewe is Growing in and with Europe. 

Despite the continued poor performance of key economic 

indicators - high unemployment, low consumer spending 

and growing competitive pressures - 2004 was successful 

for Rewe Group. Total turnover exceeded the 40-billioneuro 

mark for the first time, coming in at 40.8 billion euros. 

Wholesale and retailing in Germany and in 13 other 

European countries, combined with Rewe's travel arm, 

recorded growth of more than 1.6 billion euros (up by 

4.1 per cent). 

With the renewed increase in total turnover, which includes 

the activities of all the business areas such as food 

retailing at independent Rewe retailers and wholly owned 

chain stores, specialist stores, and the travel business 

domestically and abroad, Rewe managed to boost its 

strength and its future-oriented position in German and 

European trading. In its domestic market, the Group is 

the number two among the ten largest trading groups; in 

Europe it is the second-largest non-stock-market-listed 

company and the number three among the top ten food 

retailers. The dynamics and dimensions of its development 

are especially noticeable in retrospect: just ten years 

ago, the cooperative trading group turned over only 

around 20 billion euros when the deutschmark figures 

are converted to the new currency. Turnover in Europe 

thus doubled in a decade. 

In Germany, too, Rewe Group has continued to develop 

positively in contrast to several of its competitors and in 

contrast to the industry as a whole. Total external turnover 

in the domestic market grew by 320 million 

euros (up by 1.1 per cent) to 29.5 billion euros. 

The group's foreign activities displayed an even greater 

dynamism. Turnover in Austria, Italy, Switzerland, France, 

Poland, Hungary, the Czech Republic, Slovakia, Roma- 

nia, Croatia, the Ukraine, Bulgaria, and - as the latest 

site of expansion - Russia grew at a total of 13 per cent 

to 11.3 billion euros. The consolidated acquisition of the 

Bon appétit Group (Switzerland) played the largest role 

in this outcome. 

The share of international business in the total turnover 

for Rewe Group logically increased in comparison to the 

previous year's figures by two per cent to 28 per cent. The 

stated aim - aside from strengthening our position on the 

German market - is to continue developing this share systematically. 

In the context of a globalised trading system, 

Rewe's national position of course also needs to be permanently 

secured and expanded on the basis of an 

increasingly international orientation and presence. 

Retailing turnover in Europe was also marked by the 

stormy developments of international business. To the 

480 million euros (up by 1.5 per cent) of total growth to 

32.7 billion euros came 220 million euros in growth for 

Rewe in Germany. The latter translates into growth of 

0.9 per cent to 24.2 billion euros. 

This growth is all the more impressive considering the 

contraction in German retailing of 1.6 per cent for 2004, 

representing the third year in a row of such negative figures. 

The number of Rewe Group retail stores and travel 

agents in Europe increased by a net of 173 (up by 1.5 per 

cent) to 11,665 locations. Yet the targeted structural 

adjustments intended to promote competitive strength in 

Europe - but especially in Germany - is not yet complete. 

Profitability and the future viability are absolute priorities 

ahead of expansion at all costs. Over the past year, 

100 new own-chain locations were opened, but 230 

others were closed because they were outdated and therefore 

no longer accepted by customers. Rewe operates 

8,703 retail stores throughout Germany. The increase by

61 locations (0.7 per cent) is thus not a contradiction, but 

is instead explained by an expanded base of independent 

Rewe retailers. The total sales floor area at Rewe Group 

grew in Europe despite the adjustments by 2.6 per cent to 

9.1 million square metres. 

The Group's European wholesale business can reflect 

upon a successful 2004 fiscal year, with a rise in turnover 

of 9.5 per cent to 12.3 billion euros. The full-range wholesale 

business, which supplies the independent retailers, 

also recorded welcome growth in turnover. And in terms 

of turnover growth, the Europe-oriented bulk wholesale 

business at Rewe Großverbraucher-Großhandel attained 

the fastest growth, achieving a double-digit rate. 

Rewe Group increased the number of employees by 

297 to 131,032, whereas retailing in Germany otherwise 

lost another 20,000 jobs. The firm employs 196,224 (up by 

3,365) throughout Europe. Yet Rewe is not only living up 

to its responsibilities as a business by keeping existing workplaces, 

it is also investing considerable resources into training 

future employees. With 6,800 trainees and aprentices, 

Rewe is among the key companies offering vocational training 

in Germany. While the market for vocational training 

workplaces in Germany experienced considerable difficulties, 

Rewe hired 2,800 new job trainees last year - some 400 

above the company's labour needs. 

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13 

DEVELOPMENT OF REWE GROUP 

Rewe's total external turnover in Germany 

in billion € net 

28,3 29,8 29,2 29,2 29,5 

2000 2001 2002 2003 2004 

Rewe's total external turnover in Europe 


34,6 37,5 37,4 39,2 40,8 

2000 2001 2002 2003 2004 

Development of net turnover 1994-2004 

in billion € 

94 95 96 97 98 99 00 01 02 03 04

14 

Proportional turnover by business 


Food trade 33.86 

in Germany 23.15 

abroad 10.71 

83.5% 

Specialist stores 2.47 

6.1% 

Travel and tourism 

4.21 

10.4% 

Rewe Group's activities are subdivided into the food trade, 

specialist store, as well as travel and tourism businesses. 

Compared to the previous year, the core "food trade" 

business again gained in importance in Europe. As a proportion 

of overall turnover, food trade grew by a half of 

a per cent to 83.6 per cent (34.1 billion euros including 

central turnover). Travel and tourism - the second core 

business alongside food trade - contributed a share of 

10.3 per cent (4.2 billion euros), followed by the specialist 

store activities with 6.1 per cent (2.5 billion euros). 

Repeated record results - a billion euros for investments. 

The key data for Rewe Group presented so far 

include that of the independent Rewe retailers. The results 

achieved by the independent retailers in the cooperative 

group are excluded from the discussion of finances and 

the result position. The following description focuses on 

the business activities, including the corresponding investments, 

the Management and the Supervisory Boards 

are directly responsible for at the head offices of Rewe in 

Cologne (Rewe-Zentral AG and Rewe-Zentralfinanz eG). 

The figures for the past business year at Rewe Group, 

excluding the independent retailers, are encouragingly 

positive. Turnover was boosted in 2004 by 4.1 per cent 

from 31.9 to 33.2 billion euros. This was the case even 

though the number of chain stores was slimmed in Germany 

and abroad to 7,860 stores by the end of the year 

(previous year: 7,981). Based on the core chain outlets, 

turnover per sales floor area improved again in German 

food trade. At 133,166, the number of employees excluding 

the independent retailers remained near the level of 

the previous year (133,923). The earnings before interest 

and taxes (EBIT) at 442 billion euros were at the record 

level of the previous year. 

More than 900 million euros were invested in the continued 

development of Rewe in 2004 - 335 million euros 

more than in the prior year. The expansion of the domestic 

Share of foreign activities in total turnover 


REWE Germany 29.48 

72% 

Rewe Foreign activities 

11.31 

28% 

market position serves as the foundation for proceeding 

with our expansion into new foreign markets. Viewed 

region by region, the emphasis was on Germany and 

Western Europe for the investment volume with a share 

of 38 per cent, followed by Eastern Europe with 24 per 

cent. In Germany, the Group concentrated on the cooperative 

promotion programme for independent entrepreneurs, 

on converting the HL and miniMAL stores into a 

uniform sales brand, and on shoring up the market position 

of the Penny discounter chain. In its foreign activities, 

acquiring the rest of the Swiss-based Bon appétit Group, 

acquiring the rest of the French bulk wholesale service 

Aldis Service Plus, and launching the German-Russian 

joint venture Marta Group bear mentioning. 

Rewe traditionally finances its investments from cash 

flow, which amounted in the past fiscal year to over 900 

million euros (2003: 788). Thanks to the targeted and 

strategic investment policies and good progress in developing 

liquidity, bank debts remained nearly constant in 

2004 despite the considerable development measures the 

Group conducted. 

The conservative financial strategy will be maintained for 

2005. Growth is not an aim in itself for Rewe. Rewe is 

more concerned with attaining profitable growth: growth 

with moderation. 

Investments in 2005 will come in at around a billion 

euros. In Germany, the focus here will be on the Penny 

discounter brand, on the full-range miniMAL stores and 

on the independent Rewe retailers. In foreign markets, 

the central aim will be to bolster the market positions of 

the discounters and full-range stores.

Outlook. 

Consumer market experts started the year 2005 with a 

more positive picture of consumers once again. Expectations 

have improved for income, economic growth and 

consumer spending. Retail developments for the second 

half of 2004, the weakness in Christmas sales, and 

stagnating turnover during the first months of the previous 

year do not seem to bear out this optimism. Yet 

Rewe Group looks forward to the year 2005 with reserved 

confidence. The Group will build on its own strengths 

rather than relying only on improving economic conditions. 

Rewe intends to continue growing in its core food 

trade business and in its secondary core travel and 

tourism business in 2005. With an unchanged high 

level of investment of around one billion euros, the stage 

is set for continued growth. Rewe will thus defend its 

strong position among the leading German and European 

food trade companies and in the travel industry. In German 

food trade, we intend to continue expanding our 

market share. To this end, the Group is investing in 

opening 350 new stores. Since profitability takes precedence 

over growth, these new openings stand against 

closings of around 170 outdated, unprofitable locations. 

On balance, the store base will add some 180 new stores. 

With 175 new future-oriented locations for Rewe supermarkets 

(against around 50 closures), the independent 

Rewe retailers will especially receive an added boost. 

After the now nearly finished structural adjustments 

among the over 2,000 discount stores to the new freshfoods-based 

discounter concept, Penny is again expanding 

by opening 80 new locations. Rewe Group is increasingly 

generating long-term growth with cooperation deals 

and strategic partnerships alongside the new store openings 

and the takeovers. In line with this aim, agreements 

were signed with the dm drugstore chain and Dohle Group 

(„Hit” stores) in the first half of the year. Rewe-Zentrale 

15 

DEVELOPMENT OF REWE GROUP 

is to assume central settlements for all suppliers to the 

two companies. Centrally settling merchandise invoices 

for over 3,800 contract suppliers to Rewe Group is part 

of the core services of the Rewe cooperative for its members. 

By taking on the business for dm and Dohle, Rewe- 

Zentrale is expanding this traditional business in a focused 

manner. The two firms will reap the benefits of Rewe's 

handling the financial details of their billing and credits 

using Rewe's most modern technological systems. 

In Europe outside Germany, the Group plans to continue 

expanding its market position in a targeted and strategic 

manner. Overall, 230 new openings are slated for 13 

countries. Among these are more than 120 Penny discount 

stores and 80 Billa-brand supermarkets that have 

been quite successful in Europe. In the growing market 

for commercial customers and restaurant supply, we will 

continue expanding our leading market position in 

Germany, working to achieve this together with our partner 

Coop in Switzerland and France. To keep improving 

our competitive edge, the Group is not only investing in 

our store base in the current year, but also making substantial 

efforts to improve our information systems, our 

logistics, and our merchandise tracking as well as to train 

and qualify staff and employees. These investments will 

all be financed from cash flow.

"This is all so exquisitely prepared; you just 

want to stand right here and eat it, don't you?"

It Pays to Remember Your 

Core Competencies. 

Food trading is the core business and economic foundation 

of Rewe Group. Applying modern concepts, a comprehensive 

product range, consistent close proximity to customers 

and precisely calculated prices, the Group increased its 

turnover in Europe in the fields of food retailing and 

wholesale by 1.3 billion euros (up by 4.1 per cent) to 33.9 

billion euros. Foreign activities were also the growth engine 

in these businesses. Food trade outside Germany 

grew by 13.7 per cent to 10.7 billion euros. Overall, international 

food trade accounted for 32 per cent of 

Rewe's total business. 

Rewe broke with the ongoing negative trend on the 

German market and achieved growth in total turnover to 

23.2 billion euros (up by 0.1 per cent). In domestic food 

retailing, the 115,214 employees (up by 1,327) at 7,401 

Rewe, HL, miniMAL, toom, and Penny stores (up by 

117) increased turnover by 1.1 per cent to 20.3 billion 

euros. Rewe's share of the German food retail market 

stood at 16.7 per cent. 

The supermarkets, including Rewe, miniMAL, HL, 

Billa and Standa, were the best performing sales lines 

in food trade, achieving a turnover of 14.8 billion 

euros. Despite a slight dip in turnover of 1.4 per cent, this 

17 

FOOD RETAILING 

type of sales outlet has the potential to master the challenges 

of the „sandwich position“ between the discounters 

and the large-sales-area stores. This is especially true for 

stores with a sales area of up to 2,500 square metres. 

In Germany, the independent Rewe retailers managed to 

nudge their turnover up by 0.4 per cent despite a difficult 

business and competitive environment. The highly modern 

Rewe partnership supermarkets recorded an increase of 

2.2 per cent. The number of independent Rewe stores 

also increased by 255 to 3,717 (up by 7.4 per cent) over 

the same period. 

The positive effects of the systematic structural readjustment 

are especially noticeable when looking at the ownchain 

outlets: the number of locations pared down by 138 

to 3,684 stores (down by 3.6 per cent) stands in contrast to 

an increase in turnover of 1.5 per cent from 13.2 billion to 

13.4 billion euros. 

Converting the HL, Stüssgen, and Otto-Mess stores to 

the miniMAL brand will accelerate 

the positive trend. The development 

of each location will 

also be evaluated and then improved 

with targeted optimisation 

efforts. Using this qualitative

18 

transition, Rewe is increasing synergy 

effects, such as those found in 

IT or logistics, so that customers 

can reap the benefits in the form of 

better value for the money when 

they shop at our stores. The acquisition of 119 Extra locations 

from Metro Group has given a further boost to 

Rewe and miniMAL in Germany. Around two thirds of 

the modern, future-ready locations were taken up by 

independent Rewe retailers, while the rest were converted 

to the miniMAL brand. 

The newly founded Karstadt Feinkost GmbH & Co. KG, 

run from the food departments in 70 Karstadt department 

stores since January 1, 2005, has also made headway. 

Rewe holds a 25.1 per cent stake in this Cologne-based 

company (Karstadt holds 74.9 per cent). With a retail 

turnover of roughly 500 million euros, the firm benefits 

additionally from the procurement volumes at Rewe. Under 

the leadership of Rewe managers, central structures 

were created for the product range, merchandise management, 

IT systems and for cash register systems. Karstadt 

Feinkost GmbH, with 100 million euros of equity capital 

at its disposal, will modernise all food departments by 

2007. The firm is expected to produce positive results in 

the coming year. 

Competition in Austria has become tougher. The 

onslaught of discount stores into the market is making it 

look increasingly similar to the German market. It is thus 

all the more impressive that the 1,853 stores increased 

turnover by 0.2 per cent to 4.4 billion euros. Beyond its 

Austrian market, Rewe is expanding at a disproportional 

rate in Eastern and Southern Europe. The 210 Billa supermarkets 

recorded a rise in turnover in these countries 

of nine per cent to one billion euros. 

The discount store boom in Europe continues unabated. 

Rewe is also participating in this trend with growth 

rates well above the average. The 2,966 Penny outlets 

in Germany, the Czech Republic, France, Austria, Italy, 

and Hungary, the XXL stores in Romania, and the 

PickPay brand discounters (Switzerland) together earned 

a turnover of 8.4 billion euros. This corresponds to an increase 

of 6.9 per cent.

"You can't go wrong here, my wife says. 

Whatever you need, they have it and it's 

inexpensive. That's why I usually shop here."

"When I have a lot to buy, I want to have a big 

selection. That's why I keep coming here."

In Germany, the turnover growth figure of 5.1 per cent to 

5.7 billion euros is all the more impressive considering 

that the number of outlets declined from 2,089 (2003) to 

2,015. Rewe remained consistent here and shed locations 

that were outmoded, small, poorly located or offered too 

little parking. In contrast to several comparable competitors, 

turnover per store at Penny grew. Ever since the conversion 

of Penny to a new store concept was begun five 

years ago, turnover per store has risen every year by 

double digits. Despite this restructuring, the number of 

Penny employees has remained nearly constant. 

Customers like Penny - the number three discounter in 

Germany - for its friendly employees, its customer-friendly 

opening hours (until eight in the evening on business 

days), and the freshness and quality of its products. This 

is particularly true of its fruits and vegetables, its fresh 

pre-packaged meats, and its breads and bread rolls baked 

fresh several times every day. Penny is perceived to be a 

fresh-foods discount store, clearly distinct from its competitors. 

Internationally, Rewe already operates 587 

Penny stores with a turnover of 1.8 billion euros. A total 

of over 220 Mondo stores of Rewe Austria will be converted 

to the internationally successful Penny concept by 

the end of 2005. 

Rewe Group will expand its position throughout 

Europe in the still growing market for discount 

stores. With over 200 new store openings in Germany 

and abroad, Penny is strengthening its expansion plans. 

In Germany, there will be more new openings than closings 

in 2005 for the first time. Rewe operates 377 large-salesarea 

superstores and hypermarkets that achieved a turnover 

of 4.3 billion euros (up by 0.8 per cent) under the 

sales lines toom, Merkur and Big Billa (the latter two in 

Austria), Rewe-Center, Globus (from mid 2005 under the 

toom brand) and Iperstanda (Italy). National and international 

challenges for these stores included increasing 

21 

FOOD RETAILING 

customer satisfaction, emphasising the benefits of this 

store concept and bolstering consumer acceptance of superstores 

and hypermarkets. Despite increasing pressure 

from competitors, these challenges were mastered.

"To prepare over a thousand meals 

a day, I can't afford to make 

concessions on ingredients."

Rewe Wholesale 

Is as International as Its Customers. 

The Rewe Group wholesale business includes the activities 

of four branches: full-range wholesale delivery, cash 

and carry markets, bulk wholesale delivery, and the purchasing 

cooperative of the "Für Sie" brand. The wholesale 

business went quite well for 2004. Turnover rose by 

9.5 per cent to 12.3 billion euros. Against the backdrop 

of increasing internationalisation in procurement among 

multinational hotel and catering corporations, Rewe 

Trading Group is pursuing a strategy of securing and 

developing its leading position over the long term in the 

European food service business. Rewe's wholesale division 

is internationally organised with Bon appétit Group 

and its Howeg (Switzerland) and Aldis Service Plus (the 

market leader in France) subsidiaries. Rewe also has 

activities in Austria. 

At the beginning of 2005, Rewe Group used its joint venture 

with Coop in Switzerland, a very successful cooperative, 

to set the stage for continuing to develop its European 

restaurant and canteen sales business. The two companies 

bundled their activities for the cash and carry and bulk 

wholesale delivery businesses into the newly founded 

transGourmet Holding, laying the cornerstone to estab- 

23 

WHOLESALE 

lish themselves over the long range as the market leaders 

for restaurant and canteen sales in Switzerland. Along 

with Aldis Service Plus in France, this joint venture opens 

up the opportunity for a cross-border gastronomy delivery 

conglomerate. 

Rewe's full-range wholesale delivery business, 

which supplies the more than 3,700 stores run by independent 

Rewe retailers, managed to increase its turnover 

by 5.4 per cent to 6.9 billion euros. The marked increase 

in the wholesale delivery business thus indirectly reflects 

the economic success of Rewe supermarkets. 

Rewe is active in Germany and abroad in the cash 

and carry business. The C&C stores operated jointly 

with the Hamburg-based Otto Versand mail-order company 

under the Fegro/Selgros name increased their turnover 

in Germany, Poland, and Romania, as did the Prodega 

and Growa C&C stores in Switzerland and the Handelshof 

stores in Germany, to produce a combined 

growth of 15 per cent to three billion euros. Turnover 

growth among C&C stores in Germany was negative, 

like for the general industry trend in that segment.

24 

WHOLESALE 

At 656 million euros, Rewe's bulk wholesale business, 

based in Mainz, exceeded its turnover from the previous 

year by 9.7 per cent (2003: 598 million euros). This 

increase primarily originated from consistent work on the 

product range aimed at concentrating orders. The effort 

was flanked by detailed work on warehouse storage, 

logistics, sales, administration, and cost management - all 

with the aim of continuing to increase customer satisfaction 

and flexibility. The project of „paperless comissioneering“ 

has been running since the autumn of 2004 

to guarantee the legally mandated capability to trace the 

origins of product batches, but also to reduce potential 

sources of errors. Rewe's bulk wholesale business is thus 

feeding its image as a full-range supplier; all product ranges 

are contributing to increased turnover. Turnover for 

fruits and vegetables, meats, and the other fresh foods 

increased at an above-average pace. 

The same was true for the Honneurs private label. Covering 

around 270 products, the brand increased at a 

double-digit rate last year. The „online information and 

ordering system“ at www.rewe-gvs.de also booked impressive 

growth. Around 1,000 orders were placed at the 

site every week. The turnover thus generated continues to 

grow and was already in the double-digit million-euro 

range and accelerating. 

The Für Sie Handelsgenossenschaft eG cooperative 

offers its over 200 affiliated member companies a wide 

range of services related to procuring and marketing 

merchandise and services. The primary objectives of the 

cooperative lie in maintaining the entrepreneurial independence 

and uniqueness of its members while promoting 

their business success. Für Sie eG represents a purchasing 

turnover volume of 996 million euros. The Für Sie Handelsgenossenschaft 

eG members operate in many different 

market segments, including beverage retailing, food 

and grocery retailing, department stores, wholesale to 

serve bulk customer needs, fresh foods, pharmaceutical 

wholesale, drugstore and perfume merchandise, and 

wholesale for hair dressers. 

12 

10 

8 

Rewe wholesale: turnover in Europe 


8,2 8,9 9,2 11,2 12,3 

2000 2001 2002 2003 2004 

SORTIMENTS-ZUSTELLGROSSHANDEL FACHGROSSHANDEL

"Life is like a permanent construction 

site anyway. Good thing the right store 

to handle it is just around the corner." 

SPECIALIST STORES

26 

Despite a Difficult Business Environment, 

the Specialist Stores Remain a Pillar for 

the Group. 

Although the competitive and pricing pressures increased 

again last year, the specialist store business made a contribution 

to Rewe Group's development with an almost 

constant turnover of 2.5 billion euros. The segment thus 

outperformed the generally shrinking market. A total of 

12,055 employees - 624 or 4.9 per cent fewer than in the 

previous year - worked at 1,054 locations (down by one). 

The 258 toom BauMarkt DIY stores throughout Germany 

increased their turnover by two per cent to 

over 1.3 billion euros. On a comparable sales area, this 

amounts to an increase of around one per cent. Turnover 

progress in 2004 once again coincided with a welcome increase 

in results. This meant that toom BauMarkt managed 

to improve its business results over the previous year 

for the sixth year in a row. In its location strategy, toom 

BauMarkt is primarily focusing on optimising existing 

sales capacity: 25 renovations or expansions and four location 

changes are planned for 2005. One new store 

opening is also in the works. 

The Rewe partnership model, developed further by toom 

BauMarkt, is enjoying increasing popularity. Twenty-two 

DIY stores and four Klee gardening centres are now run 

by independent partners, each of whom holds a majority 

share in an OHG (commercial partnership) founded 

jointly with toom BauMarkt. 

Product-range design at toom BauMarkt is not limited 

only to supplying DIY needs. By now, 13 of the stores 

with the so-called 'Casa-Lea-Concept' offer customers 

not just furniture and accessories for refined tastes, but 

also well qualified interior decorating advice that covers 

the whole store's merchandise selection. In the current 

year, the number of locations using the 'Casa-Lea-Concept' 

- particularly popular among female customers - 

will double. 

Even without pursuing its own expansion abroad, the international 

procurement situation was further improved 

thanks to the toomaxx cooperation. The aim of this cooperation 

- owned jointly by toom BauMarkt from Rewe, 

bauMax Group (the leader in Austria and Eastern Europe), 

Marktkauf from AVA, and Switzerland's Coop - is 

to share in developing and procuring own brands and to 

import products, especially from the Far East.

The 50 ProMarkt stores specialising in home electronics 

The 50 ProMarkt stores specialising in home 

electronics stood their ground well in a highly concentrated 

market marked by an extremely fast price erosion. 

With its stores that have been converted to the "Discount 

+ Service" concept, ProMarkt managed a turnaround and 

booked an increase in turnover when adjusted for sales 

area, with an increasing number of customers. The comprehensive 

service and warantee offers are convincing 

more and more customers in combination with the stores' 

discount prices, establishing ProMarkt as an alternative 

to the "skinflint" concept offered by the competition. 

The drugstore business at Rewe includes 656 idea 

and Bipa drugstores. Compared to the previous year, 

turnover increased moderately by 0.3 per cent to 571 million 

euros. This low increase can be traced primarily to 

developments among the 143 idea outlets (down by 19), 

which lost 0.2 percentage points in turnover when adjusted 

for sales area. In the present year, Rewe Group thus 

sold the idea outlets to the two drugstore companies dm 

and Schlecker. In Austria, the 513 Bipa drugstores 

booked an increase in turnover of 3.2 per cent, remaining 

the market leader by a wide margin. 

27 

SPECIALIST STORES

"I don't have the time to search the 

internet for my holiday arrangements. 

That's why I came here."

29 

TRAVEL AND TOURISM 

Travel and Tourism, Our Second Core 

Business, Substantially Picked Up the Pace. 

Travel and tourism - the second core business at Rewe 

next to food trade - developed very positively last year, 

now making a substantial contribution to the Group's development. 

The consolidated total turnover for Rewe 

Touristik rose markedly by 150 million euros (up by 3.6 

per cent) to 4.2 billion euros. The number of employees 

remained nearly constant at 13,009 (down by 60). The 

proportion of Rewe Touristik's turnover in Rewe 

Group's total turnover stood at 10.3 per cent. This performance 

thus more than compensated for the declines in 

turnover resulting from terrorist attacks, the Iraq war, or 

the SARS respiratory disease. 

The Rewe Touristik strategy of emphasising individual 

operator brands for package and building-block tours 

rather than highlighting a single umbrella brand has 

proven to be the right approach. Operators were able to 

respond quickly and flexibly to changing customer needs 

and to special deals offered by the competition. This was 

particularly true for the prices that showed Rewe Touristik 

to have a good feel for the market. All operators were 

in the black. 

The Rewe Touristik tour operators continued to expand 

their position as the number three on the German 

travel market with an increase in turnover of 6.4 per cent 

to 2.7 billion euros in 2004. In the past fiscal year, the operators 

ITS, Jahn Reisen, Tjaereborg, Dertour, Meier's 

Weltreisen, and ADAC Reisen managed to increase their 

market share from 17 to 19 per cent. Measured in number 

of travellers, Rewe Touristik also performed well, 

adding a dramatic 9.2 per cent more to achieve a total of 

4.8 million guests. Considering the 810,000 paxes from 

the LTU-Plus participation, Rewe package tours even became 

the number two on the German market with over 

five million guests. 

The wholly-owned travel agencies Atlas Reisen, DER, 

and DER Business Travel performed well in the difficult 

and hard-fought sales market. The 770 travel agencies 

(down by 37) remaining after structural adjustments increased 

their turnover in 2004 by 1.8 per cent to 1.9 billion 

euros. Rewe Touristik has successfully withstood the 

growing competition with travel deals on the internet and 

from direct sellers by using expert advice in its travel 

agencies, by investing in technologies, and by offering its

30 

own travel specials online. For LTU, 2004 was a record 

year with six million passengers and a capacity utilisation 

rate of over 88 per cent. Turnover rose by more than six 

per cent to 850 million euros. Although the airline failed 

to return to the black in 2004 because of the 

dramatic price hikes in jet fuel, the cumulative efforts to 

revitalise the company remained ahead of planning. 

Despite the tsunami natural disaster at the beginning of 

2005, Rewe Touristik is quite optimistic for the current 

travel and tourism year. The number of summer bookings 

is up by a wide margin. It appears that the turnover from 

the previous year will be markedly exceeded in 2005 and 

that Rewe Touristik can develop better than its main 

competitors.

"Se i tedeschi sapessero 

come è buono questo salame, 

non ce ne sarebbe più in Italia." 

" If Germans knew how good this salami here 

tastes, we wouldn't have any left in Italy." 

FOREIGN ACTIVITIES

32 

The Growth Engine is Racing. 

Foreign activities, in particular in the quickly growing 

markets of Eastern Europe, are the growth engine of 

Rewe. Thanks to the mature portfolio of sales brands and 

concepts, the Group is well able to orient each sales type 

to meet the special needs of each country. This is the 

foundation of our business success. Total turnover from 

our foreign activities rose from 10.01 billion euros by 13 

per cent to 11.31 billion. Outside Germany, Rewe is 

represented in 13 other European countries with a total 

of 2,999 stores (up by 115). These operations employ 

65,192 workers (up by 3, 054), an increase of 4.9 per 

cent. Over the past fiscal year, the share of foreign business 

in Rewe's total turnover increased to 28 per cent. Its 

contribution to the results was even greater. 

The largest foreign subsidiary of the firm is Rewe Austria 

with a turnover of 6.9 billion euros. This was 

achieved by 40,500 employees in 2,394 stores throughout 

Europe. At 8.7 billion euros (up by 13.8 per cent), most 

of the turnover is earned in the four Western European 

countries of France, Switzerland, Italy and Austria. The 

alpine republic of Austria itself is the largest foreign market 

of the Group with a turnover of 4.4 billion euros (up 

by 0.2 per cent). In Austria, Rewe operates 1,853 stores 

(Billa, Merkur, Mondo/Penny, Bipa), 59 more than in the 

preceding year. The total employment figure rose by 300 

to 24,600. Rewe is also the leader in the drugstore market, 

where its 513 Bipa drugstores increased turnover by 

3.2 per cent. With the opening of the first two Bipa drugstores 

in Italy, this highly successful concept has undergone 

its first test outside its Austrian home market. 

The transition of the Mondo discount store chain to the 

international Penny concept went very well. By the end of 

2005, all 288 Mondo stores will have been converted. 

The stores operated under the Penny brand are quite 

popular, even recording up to double-digit turnover 

growth rates. 

With four new store openings, the position of the Merkur 

hypermarkets was systematically strengthened. These 

large-scale hypermarkets are represented in Austria at 

103 locations. 

In Italy, the 345 Standa, Iperstanda, Billa, and Penny 

stores increased their turnover by 0.7 per cent to 1.6 

billion euros. The expansion of the Penny discount store 

chain experienced particularly successful expansion into 

southern Italy. The Standa supermarkets, modernised at 

great expense, continued on course with their development.

In Eastern Europe, Rewe Group increased its turnover 

by around ten per cent to 2.6 billion euros. The fastest 

growth rates were recorded in Romania at a pace of 36 

per cent. Rewe is represented there with a total of 26 

stores (Billa, XXL, and Selgros cash-and-carry). There 

were 21 locations only a year earlier. 

With a leap in turnover of 29 per cent, the 13 Billa supermarkets 

(up by one) in Bulgaria followed closely behind. 

The strongest market in terms of turnover was the Czech 

Republic: the 224 Billa supermarkets and Penny discounters 

increased turnover by 27.3 million euros to 653 million. 

Close behind was the Polish market. The 36 miniMAL 

supermarkets and Selgros cash-and-carry stores there 

turned over 575 million euros (up by 36 million). In the 

cash-and-carry business, the 16 Selgros stores (up by two) 

in Poland and Romania made good progress: their turnover 

increased by a total of 22 per cent to 712 million euros. 

Rewe's Foreign Activities 2004 

33 

FOREIGN ACTIVITIES 

Country Store brands Number Change 

of stores on 2003 

Austria Billa, Merkur, 

Penny, Bipa 1,853 (+59) 

Italy Penny, Billa, 

Standa, Iperstanda 345 (+4) 

Poland miniMAL, Selgros 36 (±0) 

Czech Penny, Billa 224 (+10) 

Republic 

Hungary Penny 142 (+6) 

France Penny, 

Aldis Service Plus 101 (+7) 

Switzerland PickPay, 

Prodega/Growa, Howeg 153 (-6) 

Slovakia Billa 65 (+9) 

Croatia Billa 16 (+3) 

Romania Billa, XXL, Selgros 26 (+5) 

Ukraine Billa 8 (±0) 

Bulgaria Billa 13 (+1)

34 

In July of 2004, Rewe Group began to enter the Russian 

market. In the framework of a joint venture with the 

Moscow-based Marta Group, a new supermarket chain is 

to be established in the Russian Federation. The two 

parent companies will invest a joint sum of a half a billion 

dollars in this project over the next three to five years. 

Seventeen Billa supermarkets have already been opened. 

The stores offer a comprehensive assortment of foods on 

sales floors of up to 2,500 square metres. Rewe reckons 

with good growth opportunities for its Billa supermarkets 

as high-quality neighbourhood stores, particularly 

with growing competition from other sales formats 

and from national and international competitors on the 

Russian market. 

Despite its present dynamism, Rewe will continue 

to pursue growth outside Germany with moderation. 

Foreign markets are by no means homogenous; each 

country has its own business and market framework. In 

countries where Rewe is already present, the firm will 

strive to achieve a position among the top local players. 

From the standpoint of Rewe, it makes little sense to 

invest in countries and sales lines where this cannot be 

achieved. The strategy is not about market presence only 

- Rewe wants to create value with its investments. 

With this in mind, the international Penny discount store 

brand and the international Billa supermarket brand will 

both play key roles. In four European countries, Rewe 

operates 587 of these stores, which increased their turnover 

in 2004 by 7.5 per cent to 1.8 billion euros. In 

Hungary and the Czech Republic, Penny is the leader 

in the discount store segment. The discounter is also 

showing promising growth in Italy, with a rise in turnover 

of over 13 per cent. Rewe is also operating the 

XXL Mega discount store chain in Romania with 

considerable success.

35 

FOREIGN ACTIVITIES

FRANCE 

Harnes 

Paris 

Wenn der 

mit sanfte 

härteren 

Adfabilis quadrupe 

etiam Augustus ioc 

Saetosus chirograph 

sus imputat rures. 

bellis imputat GERMANY 

Cologne 

catel 

vinus REWE HEAD iocari OFFICE agrico 

fortiter adquireret o 

vius. Vix bellus fidu 

gi. Augustus satis d 

drupei, ut zothecas 

semper adlaudabilis 

losus syrtes decipe 

infeliciter insectat o 

phi agnascor quadr 

Zurich 

Syrtes senesceret Volketswil 

zo 

Berne lascivius fiducia sui 

SWITZERLAND 

um santet cathedra 

gustus. Adfabilis um 

gi, ut fragilis Milanagrico 

Augustus plane neg 

re, quamquam agri 

lascivius umbraculi 

Adlaudabilis appara 

L 

lis ossifragi, utcunq 

lus cathedras, et M 

quam Octavius libe 

reret chirographi. 

Umbraculi iocari os 

Matrimonii vocific 

braculi suffragarit a 

peret syrtes. 

Tremulus catelli fer 

lus matrimonii am 

insectat cathedras. 

apparatus bellis, et 

citer amputat orato

er Wettbewerb härter wird, kommt man 

ften Korrekturen manchmal weiter als mit 

Bandagen. 

Cathedras frugaliter senesceret adfabilis syrtes. Incredibi- 

rupei neglegenter agnascor matrimonii, 

Poznan liter fragilis chirographi optimus celeriter suffragarit Ca- 

Warsaw 

iocari cathe 

esar, etiam apparatus bellis conubium santet Pompeii, 

Berlin 

raphi senesceret cathedras. Oratori spino- POLAND quod umbraculi vocificat cathedras, semper agricolae ines. 

Agricolae insectat oratori. Apparatus 

ANY atelli, et satis adlaudabilis saburre vix diicolae. 

Saetosus umbraculi incredibiliter 

feliciter amputat oratori, quod matrimonii suffragarit saetosus 

saburre, quamquam umbraculi fermentet lascivius 

matrimonii, quod saetosus concubine corrumperet zothe- UKRAINE 

ret oratori, utcunque saburre iocari Octacas. Jirny 

fiducia suis corrumperet Prague gulosus ossifra- Fiducia suis vocificat incredibiliter fragilis quadrupei, ut- 

Lipnik 

tis divinus deciperet CZECH vix parsimonia REPUBLIC quacunque ossifragi optimus frugaliter fermentet catelli. Occas 

corrumperet plane pretosius ossifragi, SLOVAKIA tavius vocificat gulosus quadrupei. 

bilis oratori miscere saburre. Pessimus gu- Matrimonii conubium santet quinquennalis apparatus 

Bratislava 

iperet quadrupei, quamquam Vienna cathedrasSenecbellis. 

Agricolae incredibiliter comiter circumgrediet ap- 

Ansfelden 

at ossifragi, iam satis tremulus chirograparatus bellis. Ossifragi miscere syrtes. Catelli iocari sae- 

Budapest 

adrupei, etiam oratori 

AUSTRIA 

amputat Pompeii. tosus saburre, et concubine agnascor rures. Ossifragi se- 

Hallein 

t zothecas, ut Stams Octavius agnascor Kalsdorf pessimus nesceret fragilis fiducia suis, semper Augustus praemuniet 

Maria Saal 

HUNGARY 

suis, semper adlaudabilis syrtes conubi- Pompeii, et zothecas conubium santet bellus oratori, iam 

ROMANIA 

dras, utcunque zothecas praemuniet Au- adlaudabilis ossifragi lucide agnascor adfabilis catelli, ut 

Zagreb 

s umbraculi neglegenter fermentet ossifra- chirographi miscere umbraculi, utcunque zothecas agnas- 

CROATIA 

ricolae lucide adquireret Caesar, semper cor chirographi, semper Aquae Sulis adquireret catelli. 

neglegenter corrumperet lascivius sabur- Umbraculi divinus insectat optimus perspicax quadrupei. 

Bucharest 

agricolae amputat tremulus catelli, quod Augustus incredibiliter spinosus iocari matrimonii, ut- 

culi lucide agnascor pretosius quadrupei. cunque concubine agnascor zothecas. Plane pretosius ma- 

paratus Altopascio bellis adquireret pessimus adfabi- 

Lucca 

unque Octavius comiter vocificat tremu- 

ITALY 

t Medusa lucide suffragarit catelli, quamtrimonii 

lucide amputat adfabilis saburre, etiam gulosus 

BULGARIA 

concubine verecunde conubium santet Sofia fragilis zothecas. 

Caesar circumgrediet tremulus saburre. 

libere vocificat ossifragi, et oratori adqui- Cathedras senesceret fragilis rures. 

hi. Concubine corrumperet fiducia suis. Catelli satis infeliciter miscere pretosius oratori, ut catelli 

ri ossifragi. Rome 

suffragarit chirographi. Catelli divinus iocari chirographi. 

ificat fragilis zothecas, quamquam um- Parsimonia matrimonii fermentet quinquennalis ossifragi. 

rit agricolae. Matrimonii satis lucide deci- Agricolae agnascor aegre adfabilis chirographi. Rures insectat 

Medusa, quamquam saburre circumgrediet bellus 

i fermentet aegre pretosius ossifragi. Bel- syrtes. Perspicax apparatus bellis celeriter senesceret paramputat 

Medusa. Pretosius fiducia suis simonia catelli, ut zothecas suffragarit matrimonii. Fidu- 

as. Saburre neglegenter imputat tremulus cia suis vocificat Caesar. Quadrupei spinosus suffragarit 

, et verecundus agricolae pessimus infeli- matrimonii. 

ratori. 

Saetosus ossifragi amputat incredibiliter quinquennalis 

cathedras. 

Russia 

Kiev 

Moscow

"This nice store clerk not only gave me a 

great pesto recipe, she also sold me the 

fresh ingredients."

Rewe in Person. 

Well-qualified and satisfied employees are becoming more 

and more important for survival in these conditions of 

tough competition. They are the interface with our customers, 

and our customers have to be reconvinced every 

day. One of the main factors behind Rewe's success thus 

lies in developing the expertise of our own employees 

systematically in targeted areas. Rewe continues to achieve 

good year-end results only by having motivated employees 

who are committed to their work and who know what is 

expected of them, employees who can handle pressure 

and who are willing and able to learn more, and employees 

who understand their roles when interacting with customers 

- and who are ready to carry out their job duties 

responsibly. 

Human resource management at Rewe is thus an 

active and integrated part of the overall management 

process. Permanently increasing the earning power requires 

that Rewe always have at its disposal well-trained 

and well-informed employees who are also flexible and 

who can work with new technologies. For its part, Rewe 

tries to strengthen employee loyalty and, hence, motivation 

by being an attractive employer. Once this is optimally 

achieved, human resource management can make 

an immeasurable contribution to the success of the company. 

In total, 196,224 employees (calculated on a full-time 

basis) were employed at Rewe Group throughout 

Europe at the end of 2004. That is 3,365 or 1.74 per cent 

more than in the previous year. In contrast to many other 

firms, Rewe Group thus created new jobs. Even in the pessimistic 

consumer climate in Germany, 297 new employees 

were hired. With 131,032 employees, Rewe Group is one 

of the major employers in Germany. Rewe employed a total 

of 65,192 employees in thirteen countries beyond its 

domestic German market at the end of 2004 - 4.91 per cent 

more than a year earlier. 

39 

EMPLOYEES 

In the context of the difficulties on the job traineeship 

market, Rewe Group offered jobs to 2,800 

trainees during the reporting year, 400 more than 

the firm needed. 

Wolfgang Clement, the German Economics and Labour 

Minister, duly praised this effort: "Rewe Group is one of 

the largest companies offering vocational training in 

Germany. Without the commitment of Rewe and other 

trading firms, the Dual System of job training and vocational 

education would not be possible." The minister 

made his remarks at the signing ceremony for the "Vocational 

Training Checks" in the framework of his 2004 

Job and Career Training Tour. With a total of 6,800 

trainees at the company, Rewe is among the largest firms 

offering vocational training in Germany. 

Rewe has been bearing its social responsibility in this 

manner for many years, and the company always trains 

more than it needs. Throughout Europe, a total of around 

8,000 young people are in training with Rewe Group, 

with 1,300 trainees at Rewe Austria alone. 

Different training options at Rewe provide opportunities 

starting at an early age all the way up to supermarket 

store manager or independent Rewe retailer. For those 

ready to begin their careers - and depending on their qualifications 

and school certificates - training options are 

available at the subsidiaries or at the Head Office of 

Rewe Group to pursue the careers of district manager, 

buyer or IT specialist, to name just a few. 

School leavers consistently begin their traineeship searches 

with an outdated picture of traineeships and apprenticeships 

in retailing. This is particularly true of their view 

of the working hours. Yet with modern human resource 

methods, the stress is no greater than in other businesses. 

Rewe Group is responding to the elevated expectations 

throughout the business even in the form of its training. 

Aside from training on the job, computer-based training 

(CBT) and web-based training (WBT) are becoming more 

important. The modern combination of theory and prac-

40 

tical experience is reflected in the performance abilities 

of our trainees. Thus, 75 per cent of them successfully 

completed their training courses last year with at least 

satisfactory marks. Retail trades are especially attractive 

for women, who make up a higher-than-average 

share of the retail workforce at nearly 60 per cent. 

The majority of trainees choose programmes in the 

German trades "Verkäufer" (shop assistant) and "Kaufmann/-frau 

im Einzelhandel" (retail merchant). Despite 

these efforts and opportunities, Rewe Group still has 

difficulties finding candidates for training in retail trades 

who are well enough qualified. Public policy-makers 

should not consider commerce and industry as an extension 

of the school system. Schools, parents, and the 

trainees themselves must share the responsibility for 

making improvements. 

One way for young people to find out about the opportunities 

and requirements at Rewe Group is the student 

internship. Over the past year alone, 4,022 students 

participated in this three-week get-acquainted course. 

Rewe Group also shows off its credentials as a modern 

employer at school events, at vocational training fairs 

and at university job fairs. 

It is no longer sufficient for people to rely only on what 

they once learned for the rest of their careers. Profound 

and extensive training provides still the best foundation, 

but people need to adjust to the idea of life-long learning 

and ongoing qualification to keep up with the 

accelerating pace of change. 

For enterprises, this means that employees can only 

contribute to the success of the business if their expertise 

is constantly promoted. Only the best-trained and most 

capable employees can fulfil the requirements needed to 

assure the competitive edge of the company and to enable 

it to undergo continuous reorganisation, even allowing 

it to find new markets. 

Commerce is increasingly marked by globalisation, 

innovative technologies, and new markets. This calls for 

employees who can master these changes. The programme 

of cooperative study between the Europäischen Fachhochschule 

Brühl (EUFH) and Rewe is aimed at Ger- 

man sixth-form school leavers who want to combine 

vocational training for the qualification "Kaufmann/frau 

im Groß- und Außenhandel" (wholesale merchant) 

with the internationally-oriented university programme 

"Handelsmanagement" (commerce management). This 

practice-oriented seven-semester programme of studying 

commercial issues concludes with the graduating degree 

"Diplom-Kauffrau/-mann (FH)". A trainee programme 

at our Rewe Austria subsidiary prepares trainees for 

international jobs. The working methods and practices 

at a foreign subsidiary are just as much a part of the 

programme as are the processes within the outlets, such 

as giving advice to customers. 

Human resource development at Rewe Group begins 

at the moment that an employee starts training. Next, 

the trainee and the trainers jointly develop and implement 

a fixed development programme and development 

measures aimed at clearly defined target groups and 

with defined objectives (e.g.: sales promotion programmes 

for district managers, store advisors and shop 

managers). Human resource development also provides 

direction and develops new methods of teaching and 

study (e-learning) while making an essential contribution 

to know-how transfer within the whole company 

(Knowledge Management). 

All these human resource development measures are operated 

by Rewe-Nachwuchsförderung e.V. (an organisation 

promoting junior staff). For 40 years now, this 

organisation has helped to promote employees with 

targeted offers in personal and career development and 

by providing effective measures to ensure that qualified 

experts and leaders are promoted from within Rewe 

Group. In addition, each employee is offered the opportunity 

to improve his or her specialist knowledge and 

skills so as to eliminate obstacles to a successful career at 

Rewe. 

The success of these efforts was clearly on display in 

2004 when the trade publication "Lebensmittel Praxis" 

launched a competition for the "trainer of the year". Of 

the 18 awards given, seven went to Rewe and its 

trainers.

With the Rewe pension fund, Rewe supports its 

employees as they build up additional retirement 

savings. The state pension fund will not be enough to 

guarantee a standard of living similar to what retirees 

experienced before, and more and more employees now 

benefit from the financially supported conversion of 

parts of their salaries. Because senior management staff 

face a much greater gap between their last net salaries 

and their pension payments, this income disparity can 

be bridged with the help of the Rewe Higher Pension 

programme, which is offered to all managers with 

salaries above those requiring mandatory payment into 

the state pension scheme and who have also worked for 

the company for a minimum of three years. 

Occupational safety and health promotion are 

taken quite seriously at Rewe Group. This has resulted 

in a renewed decrease in occupational accidents. At 

2,269 accidents in the past fiscal year, the number of 

accidents was again below that of the previous year 

(2003: 2,381). 

"Prevention before treatment" is the motto of the Rewe 

health insurance fund. The fund promotes responsible 

health maintenance using attractive incentives and a 

prize system. But the health insurance fund also acts 

locally: over the past year, 1,645 employees were examined 

for vein disorders and illnesses at 44 locations, 

receiving advice on further medical treatment or on participating 

in free walking courses. One year after the 

first exam, the measure was repeated to make sure the 

effort was successful. 

Rewe also continued its long tradition of social 

commitment: Rewe began supporting the "Dinner Tables 

in German" initiative as early as 1996. MiniMAL, 

Rewe, toom and the Rewe warehouses throughout Germany 

cooperate with the organiser of the Happy Family 

Parties to provide needy citizens with food at around 

330 Dinner Table groups in this continuously growing 

self-help network. 

Rewe Group stores collected around 300,000 euros for 

the big "Red Nose Day" TV charity show in 2004. 

Nationwide, the group contributed to the charity event 

as a major sponsor with the participation of 3,000 

Rewe, HL, and miniMAL supermarkets where the red 

noses were sold for two euros each to benefit the Red 

Nose Day children's aid project. Total proceeds went to 

national and international children's charities. 

To promote project work with disadvantaged children 

and young people in Bolivia, South Africa and India 

financially, interested school children were offered jobs 

in the framework of "Aktion Tagwerk" (In a Day's 

Work) event, where the students contributed the wages 

they would have earned to the charity. 

Part of the core business of a company in the food trade 

business is conscientiously handling food. Rewe Group 

pays particular attention here to a healthy and balanced 

diet. With its dietary information campaigns such as 

"Fit & thin", "Low-fat 30", "Five a day - fruits and 

vegetables", "Food, fun, imagination" and "Youth and 

health" in cooperation with German Federal Health 

Minister Ulla Schmidt, Rewe Group wants to point out 

the connection between a healthy diet and a general 

sense of well-being. These programmes help to warn 

against poor diet habits as early as possible at home, in 

school or in kindergartens with numerous projects and 

events including sports activities, breakfasts or cooking 

clubs. 

41 

EMPLOYEES

z Rewe advertisement from 1957

Rewe in Changing Times. 

1927 

Rewe-Zentrale begins its operations in 

Cologne and is entered into the cooperative 

registry. Seventeen purchasing 

cooperatives had joined forces by the 

end of 1926 and agreed to found the 

organisation. The name Rewe is derived 

from the German abbreviation of 

Revisionsverband der Westkauf-Genossenschaften 

("auditing association of 

western purchasing cooperatives"). 

1932 

To demonstrate the uniformity of the 

Rewe organisation, new guidelines are 

issued on the use and design of the 

"Rewe" logo. 

1945 

In April, activities at Rewe Head Office 

finally collapse because of the war. 

A branch office in Cologne starts up 

Head Office businesses again as early 

as August. 

1947 

"Rewe-Zentralimport e.G.m.b.H." 

is founded. 

1959 

Business is expanded to include exporting 

and wholesaling. 

1972 

In the framework of Rewe Group reforms, 

"Rewe-Zentralimport 

e.G.m.b.H." becomes today's Rewe- 

Zentral AG. The Rewe wholesalers are 

the registered shareholders. Rewe-Zentral 

AG operates the goods trade. 

Rewe-Zentralfinanz eG takes over the 

duties of a credit cooperative. 

The Rewe partnership model promotes 

independent retailers at improved business 

terms. The increasing capital needs 

of the stores leads to the model of the 

Rewe Trading Companies, in which 

Rewe's Head Office may own by up 

to 50 per cent. 

43 

REWE MILESTONES 

1973 

The trading cooperative "Für Sie- 

Discount eG." in Cologne becomes a 

member of Rewe-Zentralfinanz eG. 

1974 

Rewe-Zentrale takes a 50 per cent 

stake in the Leibbrand Group. The 

expansion of the Company, founded in 

1961, continues as Rewe-Handelsgesellschaft 

Leibbrand oHG in Bad Homburg 

with the HL and miniMAL supermarket 

chains, Penny discount stores, 

toom hypermarkets, and idea drugstores. 

Rewe takes over Leibbrand ownership 

in 1989. 

1979 

Rewe wins the "Cassis du Dijon" 

ruling at the European Court of 

Justice. The judgment marks a 

milestone for free trade within the EU. 

The judgment states that any product 

that can be traded in an EU member 

country may also be offered for sale 

in every other EU country.

44 

1980 

Rewe-Wibu is founded in Mainz as a 

new partner for commercial customers; 

the organisation is a predecessor to 

Rewe-Großverbraucher- Service. 

1983 

The Kaiser+Kellermann Group, based 

in Kirchhundem, Germany, joins Rewe 

with its Globus hypermarkets. Rewe 

takes a 75 per cent stake in the company 

in 1988. 

1984 

Rewe acquires 51 per cent of the food 

chain Cornelius Stüssgen AG, Cologne. 

The remaining 49 per cent are acquired 

by Rewe-Zentrale in 1989. 

1988 

Rewe-Handelsgesellschaft Leibbrand 

oHG acquires the company Deutscher 

Supermarkt Handels GmbH, Düsseldorf, 

which operates food retail chains 

such as Deutscher Supermarkt, Desuma, 

Hill, and Otto Mess. Rewe enters the 

travel and tourism business by taking 

over a 50 per cent stake in the travel 

agency firm Atlas-Reisebüro GmbH, 

Cologne. At the time of its takeover in 

1994, Atlas Reisen operates some 300 

travel agencies. 

1990 

Rewe restructures: the three-tier structure 

(retail - wholesale - head office) is 

abandoned in favour of a more efficient 

two-tier model (retail - head office). 

The Rewe wholesalers Hungen, Efferen, 

Korschenbroich/Erkelenz and Koblenz 

transfer their business operations to 

Rewe-Zentral AG. These are then reorganised 

as the branch offices Hungen 

and West. Just ahead of German unification, 

the first Rewe stores are opened 

in Potsdam and Weimar during the last 

days of the German Democratic 

Republic. In the southern and southeastern 

regions of Germany, the 399store 

base of co op AG and the co op 

warehouse in the Neuhausen district 

of Stuttgart are acquired. 

1993 

The acquisition of a stake in Budgens 

in the UK is Rewe's first step into 

foreign markets. 

1994 

Rewe enters the Southern European 

market with Penny-Market Italia SrL. 

1995 

Rewe continues to expand its travel 

and tourism business by acquiring the 

ITS tour operator from Kaufhof. In the 

north of France, Rewe takes over 40 

discount outlets from the Eurogroup 

partner Vendex and reorganises the 

stores under the Penny brand. 

1996 

In Austria, Rewe takes over the BML 

Group with the sales channels Billa 

supermarkets, Merkur food stores, 

Mondo discount stores, Emma neighbourhood 

stores, and Bipa drugstores. 

The first outlets are launched in Hungary 

(Penny) and Poland (miniMAL). 

Rewe acquires 40 per cent of the 

ordinary shares of the German private 

TV channel ProSieben Media AG. 

1997 

The BLV-Großverbraucher-Service 

(commercial customer service) in 

Munich is acquired on 1 January. This 

expands Rewe Group's commercial 

customer business throughout Germany. 

The Company is integrated into Rewe- 

Wibu, Mainz, which is converted into 

Rewe-Großverbraucher-Service and 

becomes a branch of Rewe-Zentral AG.

1998 

Rewe takes over 52 Götzen and 138 

Stinnes DIY stores. This moves toom 

BauMarkt into the leading group of 

companies in the DIY branch. 

1999 

Rewe strengthens its position as the 

market leader in Austria with the 

takeover of 162 Meinl stores. 

2000 

After the acquisition of the DER 

Group, which owns the tour operators 

Dertour and ADAC-Reisen and 360 

DER travel agencies, Rewe Touristik 

becomes one of the key divisions of 

the Rewe Group. 

2001 

The takeover of the LTU tour operators 

(Jahn Reisen, Tjaereborg, Meier's 

Weltreisen) bolsters Rewe's position 

among the top three in the travel and 

tourism industry. At the same time, 

Rewe takes a 40 per cent stake in the 

Düsseldorf-based airline LTU Lufttransport 

GmbH. Rewe solidifies its 

position on the Italian market by buying 

the Italian Standa store chain. 

2002 

For the first time in German foods retailing, 

German customers are offered 

the TÜV-tested quality shopping seal - 

regularly inspected by TÜV Rheinland 

Berlin Brandenburg - at 500 Rewe 

supermarkets. Rewe celebrates its 75th 

anniversary. In Hungary, Rewe concentrates 

its activities in foods retailing on 

expanding the Penny discount stores 

and sheds 13 Billa supermarket outlets. 

Rewe and Edeka enter into a cooperation 

to produce and sell freshly baked 

breads, cakes, and pastries. Rewe acquires 

a 50 per cent stake in Schäfer's 

Brot- und Kuchen-Spezialitäten GmbH 

& Co. KG - a bread and pastries producer 

with its head office in Lehrte/ 

Lower Saxony. 

2003 

With the takeover of the Swiss Bon 

appétit Group, Volketswil/Zurich, 

Rewe expands its foreign activities into 

Switzerland and increases its foreign 

turnover to more than ten billion euros. 

Bon appétit Group (Pick Pay, Primo, 

Visavis, Prodega CC, Howeg, Magro, 

and Aldis Service Plus) is the number 

three in Swiss food retailing and wholesaling 

with around 5,000 employees 

and turnover of over two billion euros. 

45 

REWE MILESTONES 

2004 

After the departure of CEO Hans 

Reischl after many years of service, the 

year 2004 was a year of great change 

and renewal. For the first time, Rewe 

Group surpassed the 40-billion-euro 

mark. Karstadt Warenhaus AG and 

Rewe formed the joint venture "Karstadt 

Feinkost GmbH" for its foods 

departments. The foods departments in 

70 Karstadt department stores have 

now been under joint operation since 

1 January 2005. In the framework of 

a joint venture with Marta Group in 

Moscow, a new supermarket chain is 

being set up in the Russian Federation. 

The supermarkets run by Marta so far 

will be converted to the Rewe "Billa" 

brand.

Anyone who can calculate well can 

only profit with Rewe. With a little 

luck, it could even be serious money.

ANNUAL FINANCIAL STATEMENTS 

Win 100,000 euros each months 

with the REWE CARD.

ANNUAL REPORT 2004 - REWE Group

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