The year 2021 did not end on a high note for Ceconomy, the parent company of MediaMarkt and Saturn. After the Covid boost during 2020, the group had to face a significant drop in turnover and profit at the end of last year.
Sharp contrast
Electronics retailers MediaMarkt and Saturn recorded a fall in turnover and profit in the quarter ending December 2021 (the first quarter of the broken 2021/2022 financial year). In 2020, the high percentage of people working and staying at home provided the retail group with a record year: people were buying new TVs, game consoles and computer screens en masse. But once those investments had been made, unfortunately for parent holding company Ceconomy, things came to a standstill.
In the three months leading up to the end of December, turnover fell from 7.5 billion euros in 2020 to 6.9 billion euros now. Operating profit fell from 346 million euros to 274 million euros. However, CEO Karsten Wildberger points out that the two periods are not easily comparable. Not only was 2020 an exceptional year, but in 2021, there were several elements that threw spanners in the works.
For example, in some countries, stores were closed due to lockdowns, and in Germany, customers were only allowed to shop upon showing their Covid pass. MediaMarkt has also fallen victim to a large-scale cyber attack in December, while the global supply chain across the industry suffered. Wildberger also mentioned increased inflation and energy prices as reasons for lower sales.
Store closures?
Nevertheless, the chief executive emphasises the sales growth compared to the pre-Covid year 2019 (+2.9 per cent) and their persistent position in e-commerce. Online already accounts for 27.5 per cent of all sales. The trend would also have been “very encouraging” in the second half of December.
This year, Ceconomy is counting on a slight sales growth, although the electro-retailer also hints at potential store closures: there will be “portfolio changes”, says CFO Florian Wieser. One closure has already been announced in Belgium: the MediaMarkt shop-in-shop at Makro in Antwerp will close due to losses.
The group does not yet predict much, but profits are bound to rise. “We should all prepare for some volatility; that is simply part of the new normal”, says Wieser philosophically.
