Rewe may ditch Poland retail market

By Leah Vyse

- Last updated on GMT

Related tags Poland Retailing Hypermarket Supermarket

Speculation is mounting that Rewe, Europe's fourth largest
retailer, will pull its supermarkets out of Poland following an
influx of foreign retailers.

Reports in the Lebensmittel Zeitung​ claim the German retailer wants to sell off its 25 Minimal superstores in the country and is already in talks with competitors over a possible sale.

French retailer Auchan, which already has eight supermarkets and 11 hypermarkets in Poland, is rumoured to be in negotiations with Rewe over the 25 stores.

The increasing presence of foreign retailers such as Ahold, Carrefour and Leclerc in the Polish market is said to be the cause of Rewe's rumoured withdrawal.

Lebensmittel reported statements from Rewe's management arguing that there were far too many retailers operating in the Polish market. And that if the retailer was to pull out of any more countries, following its withdrawal from France and Switzerland last year, Poland would be the most likely candidate.

Selgros, Rewe's cash and carry division, is, however, performing much better than the supermarket format in Poland and the group now operates 10 stores there.

The pullout rumours come only a week after Rewe announced plans to spend half of its €1bn investment budget for 2006 on developing its activities in Russia and Eastern Europe.

Boris Planer, analyst at Planet Retail​ believes this is Rewe's best option for growth as there is less competition in the countries further east and they are a good opportunity for long-term investment.

Planer explained that, unlike Poland, the Russian, Romanian and Bulgarian markets still have room for growth.

And he argued it was better for the retailer to target countries where it can get a foothold and establish a brand, making it better acquainted with consumers, suppliers and local authorities; which should ease any future expansion.

Other foreign retailers are already making moves to grab what is left of Poland's retail food market. Last month fellow French retailers Carrefour and Leclerc announced expansion plans in the country.

Carrefour revealed plans to double its store numbers over the next five years by investing between PL250-300m (€65-78m) annually. And Leclerc announced plans to open two to three stores in Poland every year for the next 10 years, investing PL80m each year.

Rewe increased its turnover in Eastern Europe by ten per cent in 2004 to €2.6bn.

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