Rewe Launches Discount Offensive

German mass grocery retailer (MGR) Rewe has launched 14 Penny banner discount stores in Bulgaria and plans to launch a further six by the end of 2009. Currently operating 50 Billa supermarket stores in the Balkan market, BMI agrees with the decision to aggressively pursue the outperforming discount segment. Taking into account that headline discount store sales are expected to strengthen 10% year-on-year (y-o-y) to BGN0.33bn (EUR0.17bn) in 2009 compared to a 1.41% y-o-y contraction in headline MGR sales, ongoing thriftiness should allow Rewe's Penny stores to settle fairly quickly.

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