Metro AG, Europe's fourth-biggest retailer, saw a recovery gain pace at three of its four businesses in the important Christmas quarter, with consumer electronics the strongest since 2006. Ciara Lee reports.
It's Europe's fourth biggest retailer, and it's recovery is gathering steam. Germany's Metro has over 2000 stores in 30 countries. But it's been slimming down its portfolio and cutting costs to focus on its wholesale and consumer electronics businesses. It's paid off. Overall growth of electronics in the all important Christmas period were the strongest since 2006, with Spain and eastern Europe doing particularly well. Media-Saturn - Metro's consumer electronics arm and the biggest player in Europe - had been losing sales to the likes of Amazon. But since it went online four years ago, it's been growing fast - e-commerce sales were up more than 25 percent in the quarter. And overall, Metro's full year sales are expected to rise slightly despite a challenging economic environment. Darren Sinden from Admiral Markets says it's quite a contrast to struggling Tesco - Europe's third biggest retailer. (SOUNDBITE) (English) MARKET RESEARCH AND CLIENT RELATIONS MANAGER, ADMIRAL MARKETS UK LIMITED, DARREN SINDEN, SAYING: "The European model has always been, we can see that that here in the UK in the way that the discounters Lidl and Aldi operate, has been a very cost conscious, very efficient model. Limiting the number of lines that they sell. Knowing their market and getting their markings right. And not having extraneous peripheral costs. That's the kind of thing Metro and other European retailers are very good at." The cash-and-carry business accounts for almost half of sales, they grew thanks to strong growth in Asia and Russia, although profit there was wiped out by the fall in the rouble. Shares in Metro, which fell 29 percent last year largely due to Russia, were up 3.3 percent in early trade. Metro was forced to halt a stock market listing of a stake in its Russian cash-and-carry operation due to the Ukraine crisis. The firm faces other challenges too. Its Real hypermarkets are in competition with discounters such as Aldi and Lidl. It's hoping a revamp of 50 stores will help to maintain the recovery.