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Germany-based Metro has reported its first quarter results saying total sales fell by 0.6% to €8.0bn. Metro said in local currency terms sales had risen by 2.1%, with the fall in sales ‘due to the negative development of the Russian and Turkish currency’. However, the company was able to report that like-for-like sales had risen by 2.3% during the period, with it noting this was ‘mainly driven by Eastern Europe (excluding Russia) and Asia’.

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Companies in Spain pledge to making food healthier, DIA makes more leadership changes, and Makro accelerates the digitalisation of the HoReCa industry in Spain.

Reducing sugar, saturated fats and salt

The minister of health, consumption and social welfare, Maria Luisa Carcedo, has signed agreements with 20 associations that represent 398 food and drinks companies to reduce the average amount of sugar, saturated fats, and salt in products by 10% by 2020. The plan covers 13 food groups including: soft drinks, ready meals and breakfast cereals. 

The strategy fits into the government’s strategy of nutrition, physical activity and prevention of obesity. Spain has one of the highest obesity rates in Europe with 37% of adults overweight and 17%. The figures are worse for children with 40% overweight and 18% obese. The agreements are a step towards preventing obesity and countering inequalities in health, with the government keen to use a collaborative approach between the public and private sector.

According to Europa Press, leading retailers and manufacturers like Mercadona, Consum, Kellog’s, Coca Cola, Pepsico and Bimbo are involved. Businesses will need to reformlate their products and make the first move to gain a competitive advantage.

Further changes to personnel at DIA

The group has created a new executive committee of seven members, headed by CEO Borja de la Cierva. With these most recent changes DIA aims to make its offer more appealing to customers, simplify processes and drive efficiencies.

Makro driving digital transformation

InfoRetail reports that Makro has driven the digital transformation of 12,000 bars and restaurants in Spain during 2018. Its initiatives fit into Metro AG’s international plan to digitalise the hospitality industry, and bring it on par with other industries like travel. To support the sector, Makro will launch a digital platform service to aid companies with their digital transformation.

The first electric lorry is tested in Spain

According to International Supermarket News Lidl and Mercadona have been chosen to test Man's heavy duty 26-ton electric truck. Germany-based Man Truck & Bus will run distribution tests in Madrid, the first location chosen outside Austria. The initiative is expected to be rolled out in 2025. The truck currently takes over four hours to charge, and it is hoped by 2025 the time will have reduced. Man Truck and Bus partnered with SPAR Austria last year and has been testing its electric truck there since September 2018. 

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Metro’s total sales declined by -0.6% to €8.0bn in Q1 2018/19, compared to the same period last year. The decline was driven by negative currency effects in Russia and Eastern Europe. Like-for-like (lfl) sales for the group rose 2.3% in the period. Eastern Europe (excluding Russia) and Asia remain Metro’s most dynamic regions, whilst Germany saw a decline in lfl sales.

Q1 2018/19 results by region

Western Europe

  • Lfl sales in Western Europe increased by 1.0%, driven by HoReCa customers
  • In Germany, Metro’s main market, lfl sales were down -0.2%

Eastern Europe and Asia

  • In Eastern Europe (excluding Russia) lfl sales grew by 6.4%
  • In Asia, lfl sales grew by 5.9%
  • Lfl sales in Russia were down -2.4%, despite a continued monthly improvement. Russian sales have been helped by a new commercial strategy, and expansion of the franchise banner Fasol

Sales growth across countries was driven by food and HoReCa customers. Metro’s delivery business has also been developing successfully. During Q1 2018/19 the group opened one store in China and one store in Turkey.

Read Metro’s FY 2017/18 results here.

Real up for sale

Metro’s hypermarket business real, which is officially reported as discontinued operations, saw a slight decrease in lfl sales at -0.5%. Read more on the sale of Real here.

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Germany-based wholesaler Metro Cash and Carry’s division in India, according to the company, has turned a profit for the first time in 15 years.

2.8% decrease in sales

Metro Cash & Carry reported a decrease in sales of 2.8% from €798m in 2016-17 to €776m in 2017-18. The company’s country-specific profit figures remain unknown. However, it has been reported that sales in local currency (INR) increased by 11% to INR61.4bn.

Commenting on the results, Metro’s CEO Olaf Koch said, “Five years down the line, the Indian arm should generate significantly more than €1bn in turnover and should continue to grow in profitability… If you look at the sheer potential of the markets we are serving, I cannot see the Cash & Carry model becoming redundant, not even in the most advanced economies”.

Private label

Discussing the company’s private label, Koch said, “Metro India could learn about private labels from other markets. The contribution from our private labels here is in high single digits but it should be in high double digits, specifically in wholesale”.

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