German retailer Rewe buys wholesaler Lekkerland

German supermarket chain Rewe is buying wholesaler Lekkerland for an undisclosed sum to help boost sales of on-the-go meals and snacks, the company said.

Lekkerland delivers products to petrol stations, bakeries, newspaper stores, takeaway restaurants and other traders in seven European countries. It made an operating profit of 93 million euros ($104 million) on sales of 12.4 billion euros in 2018.

“On-the-go and consumption outside of the home are among the strongest trends in our industry and will play an even more important role in the future,” Rewe Chief Executive Lionel Souque said in a statement.

Souque said Rewe would also benefit from Lekkerland’s specialised logistics. Rewe plans to use Lekkerland to build up a new convenience business sector. The deal needs approval from competition authorities.

Retailers are increasingly looking for ways to build scale in sourcing - either through mergers or partnerships - to help them compete with discounters like Aldi and Lidl. Britain’s biggest retailer Tesco last year completed a 4 billion pound ($5 billion) takeover of wholesaler Booker.

Rewe is Germany’s second largest supermarket chain after Edeka and cannot grow much more in traditional food retail in Germany as the competition authorities have said the sector is already concentrated among a small group of dominant players.