German retail group Metro has had a disappointing quarter: between 1 October and 31 December 2013, the concern saw its turnover drop 3.3 % to 18.7 billion euro.
Cash & carry shrinks in Western Europe
The holding company of Makro, Media Markt and Saturn saw two main reasons for the drop: average holiday sales and an expensive euro, which damaged income from outside the eurozone. Taking the currency effects out of the equation and ignoring the closure of supermarkets in Eastern Europe and electronics stores in China, results instead showed a 1.1 % sales increase.
The Cash&Carry part of Metro/Makro still contributes most to the turnover, as it delivered an 8.5 billion euro turnover. That is a 1.2 % drop in absolute numbers, but on a like-for-like basis, it is a 0.9 % rise. Western European sales still dropped, despite a German product catalogue shift introducing new products.
Electronics and hypermarkets struggled
Media Markt - Saturn saw its turnover drop 0.7 % to 6.6 billion euro, but on a like-for-like basis the drop was even 1.2 %. Especially Eastern Europe struggled, but Metro’s electronics branch received a huge boost from its online sales. Its web shop Redcoon contributed significantly to that number with a growth of 40 % in sales.
The Real hypermarkets suffered the most due to intense competition with discounters. Its turnover reached 2.6 billion euro (-16 %, but on a like-for-like basis, only a 1.9 % drop). Galeria Kaufhof managed a 1 billion euro turnover, a 0.6 % increase.
Focus on emerging countries
Metro is active in more than 30 countries in Europe, Asia and North Africa. 2013’s final quarter saw the concern open another 36 stores in 9 countries: 10 Cash&Carry’s, 25 Media Markt – Saturn stores and one Real hypermarket. Emerging countries like China, India, Russia and Turkey welcomed 20 of these new stores.
Full financial results about the final quarter of 2013 will only be divulged on 11 February. Metro’s fiscal year runs from 1 October to 30 September.
(Translated by Gary Peeters)