German food retailer Rewe Group has insisted its ongoing redevelopment of discounter Penny is having a positive impact on its overall performance, despite recent concerns over the chain's viability.
Speaking exclusively to the Frankfurter Allgemeine Zeitung, Rewe chief executive Alain Caparros said profits at Penny had fallen due to recent poor sales and the cost of refurbishing its approximately 2,400 stores across Germany.
Caparros also revealed that Rewe's overall group sales for 2011 had increased 2.7 per cent to €48bn, a figure he said had been adjusted following the recent sale of foodservice business TransGourmet.
Changes have been made so far to 250 Penny outlets, notably introducing more branded products and removing certain non-food lines, with total banner sales apparently showing an increase of 2.8 per cent year on year having flatlined in 2010.
'Rewe does not work without Penny,' Caparros told the newspaper, adding that he wanted the discounter to focus more on quality, freshness and the consumer's shopping experience.
Rewe is also planning to open around 100 Temma outlets in the next few years. The Temma concept offers organic produce in a modern neighbourhood store setting.
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