Metro Q2 driven by Eastern Europe and Asia

Date : 09 May 2019

Germany-based Metro said like-for-like sales rose by 1.2% in its second quarter, with total sales rising by 0.2% in the same period, at constant exchange rates, to €6.75bn. The company said the results were driven by a positive performance in Eastern Europe, excluding Russia, and Asia. Metro noted the impact of ‘the shift of the Easter business to April and thus to Q3’.

Delivery business increases share of total sales

Metro said in Germany like-for-like sales contracted by 3.1% in Q2, while total sales fell by 4.1%, due to the shift of Easter into Q3. Excluding the effect of Easter being later in the year, Metro said like-for-like sales would have been ‘almost flat’, with a contraction of only 0.1%. It highlighted the positive effect it was seeing amongst HoReCa customers in a pilot region, where sales have risen by 5% since the beginning of the 2018/19 financial year.

Metro said that sales through its delivery operations rose ‘by around’ 9%. The pace of development means that the delivery business accounts for 20% of Metro’s total sales. It highlighted how the ‘digitalisation of the core business is… progressing’, with a digital ordering process available in 17 countries. Metro said 40% of all orders are done online.

Performance differing by region

Metro reported that in Q2, by reporting segment, that:

  • Western Europe (excluding Germany): total sales fell by 0.3%, while like-for-like sales decreased by 0.3%, affected by Easter’s shift
  • Russia: total sales fell by 2.3%, in local currency terms, while like-for-like sales decreased by 4.0%. It said the initiatives it had implemented, including investment in price, were taking effect, but more slowly than expected
  • Eastern Europe (excluding Russia): total sales increased by 6.8%, in local currency terms, while like-for-like sales also rose by 6.8%
  • Asia: total sales rose by 4.7%, in local currency terms, while like-for-like sales grew by 3.6%

Metro entering exclusive talks on disposal of Real

In the results announcement Metro said like-for-like sales fell by 5.1% at its Real hypermarket division. Total sales contracted by 6.2% due to the closure of three stores and the temporary shutting of one more, while the overall performance was affected by the shift of Easter into Q3. Metro said the gross merchandise value of its online business rose 53% to €130m.

Separately Metro is entering exclusive negotiations that could lead to Real’s sale to a consortium lead by redos. It said the exclusivity would run until the end of July, with negotiations expected to be completed in the summer. The sale will see Metro retain a 24.9% stake in Real’s operating business, but its ‘liabilities will be assumed by the new owner’. Real’s sale will enable Metro to focus entirely on its wholesale operations.

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