Metro fights for customers with price cuts

Metro fights for customers with price cuts

Media markt and saturn played a major role in this, with their cash registers ringing somewhat stronger than a year ago, even though the european soccer championships and digital satellite technology brought a significant tailwind at the time. However, media-saturn’s operating loss increased significantly – partly because the industry paid fewer subsidies for advertising costs.

Germany’s largest retail group broke even in the first half of the year. In the same period of the previous year, a loss of 105 million euros had been posted due to extensive negative special effects. Group sales down 2.3 percent to 30.8 billion euros. Adjusted for the sale of real eastern europe, the disposal of the wholesale business in the uk and the withdrawal of media markt from china, sales remained constant. The ordinary share, which climbed by more than seven percent by the afternoon, was the best-performing mdax stock.

"The disposable incomes and purchasing power of our customers continued to be burdened almost everywhere in europe by government austerity measures," explained metro boss olaf koch. But the dusseldorf-based group is making significant progress in expanding its online business and in restructuring the group. Media-saturn in particular gained market share. In europe, a wave of consolidation is underway in the electronics trade. Prices in some countries under particular pressure due to sell-outs. Media-saturn is not interested in promarkt stores, it said.

Among the metro subsidiaries, the dominant metro wholesale business for commercial customers and the real estate division in particular generated operating profit growth in the first six months of 2013. The supermarket chain real also increased its operating profit – but only thanks to a substantial effect from the sale of the eastern europe business. Real severely affected by warning strikes, says metro board of management. The supermarket chain cut prices on around 2,000 products.

By contrast, media-saturn’s operating loss for the first half of the year rose by almost one-third to 104 million euros. Operating loss also increased at the kaufhof department store chain as provisions were made for the closure of three stores in dusseldorf, heilbronn and augsburg. At kaufhof and real, more than 55,000 employees will receive a 2.5 percent pay rise even before a collective bargaining agreement is reached in the retail sector.

The bankruptcy of the praktiker DIY chain also affects metro because it is the lessor of 40 praktiker DIY stores in germany. A provision in the double-digit millions has therefore been recognized in the group’s half-year balance sheet.

The future fiscal years of metro AG will be announced on 1 january each year. October start. This marks the start of the important christmas trading period, in which the retail giant earns the bulk of its profits. The management board hopes that this change will make it easier to plan ahead. In addition, inventories will no longer be taken during the christmas rush.