Edeka tackling discount threat

- Last updated on GMT

Related tags: Germany, Euro

Germany's biggest supermarket retailer, Edeka, is to tackle the
threat from discounters such as Aldi with a 500-strong line of
cut-price own label products.

Edeka​, Germany's leading supermarket group, reported a slight decline in sales in 2002 to €32.5 billion, but put a positive spin on the figure, highlighting a 1.5 per cent increase in sales in the final quarter and a 3 per cent hike in the first three months of the current year.

Sales last year were affected by consumer uncertainty over the introduction of the euro, the company said, with total German food retail sales falling 2.7 per cent over the 12 months, according to data from market research group GRP.

But Edeka is expecting a steady improvement in its operations this year, despite continued concerns about the state of the German economy as a whole. Major restructuring of the company's operations during 2002 is expected to bear fruit this year.

These measures include merging the operations of a number of Edeka's regional wholesale operations, as well as negotiating national supply deals with a number of major food producers.

The company has also taken action to combat the popularity of hard discount operators such as Aldi or Lidl, introducing a line of around 500 low-priced products which are designed to win over customers from discounters.

While the group is keen to take on the discounters head to head on price, it is also working to distinguish itself from them in terms of quality. It has introduced a range of 1,000 or so products offering high quality at consumer-friendly prices.

Some €400 million will be invested in further developing the Edeka business this year, including the opening of 250 new outlets, increased staff training and further efficiency measures, the company said.

Related topics: Market Trends

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