REWE Group
Annual Report 2020

Commitment
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Penny International
Working closely with local suppliers in every country is part of PENNY International’s success story. During the coronavirus pandemic, the discounter further intensified these partnerships – for the benefit of all parties involved.

High rates of infection, hospitals in a state of emergency, people in fear of becoming infected – Italy was the first country in Europe that was hard hit by the coronavirus pandemic in the spring of 2020. Supply chains were severed, the economy collapsed. In this situation, PENNY Italy developed a special campaign, which was aimed at helping small and medium-sized local businesses in particular. This gave them the opportunity to list their products with PENNY through an accelerated process. “Normally, around 70 per cent of the products we offer already stem from local production. But during the crisis, we considered it our responsibility to increase this amount and thus contribute to rebuilding the economy,” says Nicola Pierdomenico, CEO PENNY Market Italy.

Small and medium-sized suppliers otherwise hardly have the opportunity to be listed with such a large food retailer, as they lack the production and logistics capacities required to supply a retailer the size of PENNY with just under 400 stores throughout the country. The response was impressive – 300 manufacturers applied and around 60 were selected to participate. PENNY named this campaign “Hugs for Italy,” a declaration of love for the country. “We wanted to show that we as a German company support the region in which we work. This applied to both the customers as well as the suppliers,” emphasises Nicola Pierdomenico. Furthermore, this resulted in an even more regional product range throughout this time period. Fresh products, in particular, are now more frequently sourced from suppliers that operate in close proximity and less often from national or even internationally active providers.

Penny
Italy
Development of GDP 2020
9.2
%
Number of stores 2020
392
Number of employees
2020
4,236
2019
3,984

Learning from the experiences of the Italian employees

Observing the staff in Italy provided employees of PENNY Czech Republic and PENNY Hungary with insight early on in the pandemic regarding the challenges that they would also have to face. Panic buying, worried customers, store employees faced with additional tasks and risks, while requiring the majority of employees at headquarters to work from home – all of this already happened in Italy in March 2020. “The pandemic arrived in Hungary weeks later. This allowed us to learn from the experiences of the Italian employees, for example, preparing hygiene measures or making plans regarding logistics,” explains Florian Jens Naegele, CEO PENNY Hungary. The discounter, one of the country’s largest food retailers with 226 stores, also had to address additional country-specific challenges. For example, the regulation quickly adopted by politicians, stipulating certain periods during which only people age 65 and older were allowed shop in the stores. How can such measures be organised, communicated and controlled virtually overnight? “It was an incredible challenge,” recalls the CEO.

PENNY
Hungary
Development of GDP 2020
6.1
%
Number of stores 2020
226
Number of employees
2020
4,585
2019
4.250

PENNY Hungary’s commitment: “Hungary – our home”

PENNY Hungary responded quickly, contacted its long-time domestic suppliers and was able to secure additional quantities. According to Florian Jens Naegele, having a close-knit, reliable network and constantly fostering good relations with suppliers has paid off. In addition, PENNY established a close bond with the Hungarian Chamber of Agriculture and joined its online platform “NAK Market Place.” Then the discounter launched a campaign aimed at supporting local products in the summer. The message was: Hungarian farmers invest their heart and soul into their work and by purchasing these goods, customers are also benefiting from and becoming involved in this dedication, this affectionate gesture. By involving well-known influencers, short videos featuring local producers going about their everyday work were produced and put online. A TV commercial series demonstrates the life cycles of Hungarian products – from planting on the field to the shelves of a PENNY store. “This campaign was very well received by our customers. Unfortunately, there are significantly fewer opportunities in Hungary to differentiate regionally as in Italy. Therefore, we generally emphasise offering primarily local products. “That is why our commitment is to ‘Hungary – our home,’” explains Florian Jens Naegele.

PENNY
Czech Republic
Development of GDP 2020
6.5
%
Number of stores 2020
392
Number of employees
2020
7,780
2019
7,483

PENNY Czech Republic: “Proudly nicely the Czech way”

Throughout the crisis, PENNY Czech Republic also focused on the closer collaboration with local suppliers. Czech products are already regarded as an important part of the product range. Most of the products at PENNY in the Czech Republic are sourced locally. Around 130 suppliers from the entire country regularly enrich the shelves of the more than 390 PENNY stores with thousands of different products. This includes a total of 53 local bakers and 25 beer suppliers from the various regions. “We once again strengthened our commitment at the beginning of the coronavirus pandemic in an effort to help regional manufacturers strongly impacted by the lockdown, so that they could completely resume production,” explains Jens Krieger, CEO PENNY Czech Republic. In addition, the discounter launched a comprehensive marketing campaign in April 2020 to encourage people staying away from stores out of fear of becoming infected with Covid-19 to start shopping again. This included PENNY providing information about the high hygiene standards at its stores. Whether Plexiglas walls at registers, disinfectant dispensers, contactless payment options, significant investments in protective equipment or the thorough cleaning of stores and shopping carts – PENNY Czech Republic went beyond the extent prescribed by laws and regulations and invested far more in the safety of its customers and employees right at the beginning of the pandemic. When the customers came to the stores, then the message of the broadly-based campaign was to give preference to local products. Beer and bread from regional suppliers, fruit and vegetables from the neighbouring farmers and meat from the butcher around the corner. The campaign also featured a television commercial. “The goal of this was not just to encourage national pride and solidarity, but rather to express our thanks to all those who contribute to overcoming difficult situations throughout the pandemic,” emphasises Jens Krieger.

Regardless of whether national, regional or even local products are on the shelves: Throughout the coronavirus pandemic, PENNY International demonstrated that their affinity to the respective country is part of their DNA. Moreover, this guarantees an attractive product range, supports the local economy and is appreciated by customers – now more than ever during the crisis.