In its Q3 2019/20 results, Metro reported a 17.5% decrease in like-for-like (LFL) sales, compared to the previous year, driven by the Coronavirus (COVID-19) pandemic and its negative impacts on the hospitality sector. However, as of July this year, Metro noted that sales had recovered to the previous year’s level in its Hotels, restaurants and catering (HoReCa) division.
Germany: like-for-like sales declined by 9.5%
Metro Germany reported a like-for-like sales decrease of 9.5% in its Q3 2019/20 results, with reported sales falling by 9.4%. The decline was driven by a decrease in sales with HoReCa shoppers because of COVID-19. The Group was able to compensate for the decline through positive development of the Service Companies & Offices (SCO) business, however, Rungis Express was negatively affected by the lockdown restrictions.
For the first nine months of Metro’s 2019/20 reporting period, like-for-like sales fell by 1.9%, while reported sales declined 1.9% to €3.5 bn.
Western Europe: like-for-like sales fell by 32.8%
In Western Europe, Metro’s Q3 2019/20 like-for-like sales decreased by 32.8% due to restaurant closures from COVID-19 in France, Italy and Spain, while reported sales decreased by 32.9% to €1.9 bn.
For the first nine months of Metro’s 2019/20 reporting period, like-for-like sales declined by 13%, with a decline of 13.1% to €7 bn in reported sales.
Russia: like-for-like sales increased by 6%
Metro Russia’s like-for-like sales for Q3 2019/20 were positive at 6% due to an increased demand from Trader and SCO consumers. The positive increase was driven by previous repositioning measures and additional consumer purchases during COVID-19. Local currency sales grew 6.5%, however due to poor exchange rates, reported sales declined by 3.7%.
For the first nine months of Metro’s 2019/20 reporting period, like-for-like sales increased by 2.5%, while local currency sales increased by 3% and reported sales rose by 2.9% to €2.1 bn.
Eastern Europe: like-for-like sales declined by 7.4%
Metro’s Q3 2019/20 results for Eastern Europe showed a like-for-like decreased of 7.4% due to government restrictions but compensated by the Trader and SCO business.
Local currency sales decreased by 7.5%. However, due to a negative currency effect, especially in Turkey, reported sales decreased by 12.2% to €1.6 bn.
For the first nine months of Metro’s 2019/20 reporting period, like-for-like sales were positive at 2.4% driven by sales in Turkey, Ukraine and Romania. Local currency sales grew by 2.4%, while reported sales increased by 0.8% to €5.3 bn.
Asia: like-for-like sales declined by 19.2%
In Asia, Metro’s Q3 2019/20 like-for-like sales decreased by 19.2% due to sales of Classic Fine Foods and COVID-19 impacts in India and Japan. Local currency sales declined by 18.9%, while reported sales dropped by 22.5%.
For the first nine months of Metro’s 2019/20 reporting period, like-for-like sales declined by 5.2%. Local currency sales decreased by 5% and reported sales declined by 5.7% to €1.2 bn.
Delivery sales halved
For the Q3 2019/20 results, Metro’s delivery sales decreased by 47.3%. This represented a share of sales of 12%, versus 18% in Q3 2018/19.
For the first nine months of Metro’s 2019/20 reporting period, delivery sales declined by 15.3% to €2.9 bn. Delivery sales’ share of business during this period was 15%, versus 17% in the same period last year.
As of 20 June 2020, the store network included 679 stores, 2 more than the previous year.
Outlook for 2019/20 financial year: LFL to decline between 3.5%-5%
For the following 2019/20 financial year, Metro expects its total sales and like-for-like sales to decline between 3.5% and 5%.
Russia and Eastern Europe expected to fare better than Western Europe and Asia
Metro expects performance to be stronger in Russia and Eastern Europe, although Western Europe and Asia are expected to perform weaker than the Group for the 2019/20 financial year.
Lockdown liftings and Management Board actions support new growth
The gradual liftings of the lockdown restrictions and measures taken by the Management Board to adapt to the market have led to the recovery of the HoReCa sales development. Meanwhile, Trader and SCO sales grew above the pre-pandemic levels.
Sales have recovered in Q4, especially from July
During the beginning of Q4 2019/20, sales further recovered. This was driven by improvement in the HoReCa business, especially in July where sales have reached the previous year’s sales level or are growing again. The Group expects its business development in Q4 2019/20 to be in line with the previous year’s level.
However, Metro’s outlook assumes of stable exchange rates and the negative impacts of COVID-19 will not increase again in relevant countries where Metro operates.
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