Rewe's "big bang" rebrand

Rewe's rebrand, which will cost €40m (£27.4m), is set to roll out instantaneously across nearly all its fascias, with logos, shop fronts, shelving and price tags all homogenised to fit the company's new look.

But a decision has not been made on Rewe's underperforming Toom hypermarket format, and it will be sticking to its existing fascia for the time being.

However, continuing weak domestic consumption and a costly modernisation programme recently introduced across the group - of which the rebrand is a part - has impacted financial performance.

The firm announced in April that total group turnover for 2005 rose by a nominal 2.2 per cent to €41.7bn, bolstered by international growth of 4.9 per cent to €11.1bn.

But Europe's fourth largest retailer made little ground in its domestic market, with turnover up just 1.5 per cent to €29.9bn.

Rewe hopes the modernisation initiative will reshape its image in Germany and across Western Europe.

Its plans for Central and Eastern European operations (CEE) involve a huge investment programme that will see Rewe spend €1bn to expand its store base, with a two-fold increase in Russia alone.

The firm, now active in 14 countries, has been encouraged to invest in CEE after achieving consecutive double-digit growth rates in 2004 and 2005.

And figures from retail research group IGD show that food retail per capita is significantly lower in CEE, suggesting there is real potential when these markets mature.