Metro publishes disappointing net results

Metro publishes disappointing net results

German retail group Metro has announced financial results for the first quarter of 2012 that stayed well below expectations. Their net loss of 81 million euro was attributed mostly to the under-performing electronics division Media Markt - Saturn.

Worldwide turnover growth - except in Western Europe

Metro's turnover went up 2.2% to 15.6 billion euro, despite the economic crisis and very low consumer confidence that keeps Western European consumers on tight budgets. Most of the growth was therefore achieved in Asia and Africa (+15.2%) and Eastern Europe (+3.5%).

 

In Western Europe, Metro's turnover decreased by 1.2%, while in its home market Germany an excellent performance by the Cash & Carry department led the group to a 1.6% growth. Media Markt and Saturn's turn towards online sales also pushed the sales figure in the right direction.

 

Still, the rising turnover could not prevent that major investments – price cuts and expansion costs for Media Markt and Saturn – drove Metro's operational result down from +142 million euro in last year's first quarter to -9 million now.

 

Employees to pay for poor results

To compensate these losses, Metro will reduce further investments this year by 10% to 1.8 billion euro, and look for other ways to cut costs as well. Analysts expect two important measures: redundancies in the Düsseldorf headquarters and a (temporary) halt to the Indonesian expansion plans.

 

As Metro will remain focused on Cash & Carry and Media Markt – Saturn, its two other chains Kaufhof and Real will continue to lose importance for the group. The group is still looking for interested parties to take over either of them, but Koch realises that in the current circumstances, finding one will not be easy.

 

For the rest of the year, Metro predicts sustainable growth in sales and profits. Contrary to former CEO Eckhard Cordes, whose main objective was to limit losses, the new chairman aims to raise turnover in existing stores (like-for-like).

Questions or comments? Please feel free to contact the editors


Shoptalk Europe: prices go up at midnight

21/09/2017

(advertorial) Shoptalk Europe, the event for retail and ecommerce innovation held 8-11 October 2017 in Copenhagen, covers trends, technologies and business models reshaping how consumers discover and shop in an age of digital disruption.

EuroCommerce: protectionism, Europe’s greatest challenge

15/09/2017

(Content provided by EuroCommerce) According to EuroCommerce Director-General Christian Verschueren, the sector faces many challenges due to a rising tide of protectionism worldwide and within Europe.

Last ten days for cheaper tickets Shoptalk Europe

14/09/2017

(advertorial) Shoptalk Europe (8-11 October in Copenhagen) is the new event for retail and ecommerce innovation. It covers transformational trends, technologies and business models reshaping how consumers discover and shop in an age of digital disruption.

"EU has to define eCommerce's boundaries better"

13/09/2017

Dutch European Parliament member Marietje Schaak feels the European Commission should create a better framework for digital trade in and with European member states. Otherwise, major internet companies will decide the standards themselves, she fears.

Europe wants legal framework for franchisees

13/09/2017

The European Parliament has accepted the “The functioning of franchising in the retail sector” study, which lists several solutions to strengthen a franchisee’s position.

Google appeals European fine after all

12/09/2017

Despite earlier indications that Google would just alter its Google Shopping approach to comply with European legislation, it has now decided to appeal the monster fine.

Back to top