Eurozone crisis affects Metro profits

Published:  21 Mar at 6 PM

As reported by the BBC, German retail giant Metro has announced a sharp drop in profits, as European consumers cut back on spending in the thick of the economic crisis.

Net profits dropped 26% to 631 million euros ($833 million; £525 million) in 2011. No improvement is expected this year, said Metro.

The firm had previously hoped to sell Galeria-Kaufhof, its department store chain, but unfavourable market conditions forced it to delay these plan in January. Metro also owns Europe's largest chain of electrical stores, Media-Saturn.

CEO Olaf Koch, who took over in January 2012, said the firm had hoped to see improvements last year, which did not happen. Conditions became much worse, he explained.

Mr Koch also warned in a statement of further cost cutting plans under his leadership. He said the company had achieved its cost saving targets via Shape 2012, but there was still a lot of potential in regard to productivity gains.

Sales at Metro's largest business, Metro Cash and Carry, went up 0.2% last year to 31.2 billion euros. However, both Galeria-Kauhof and Media Saturn reported falls in sales.
Media Saturn sales dropped 0.9% to 20.6 billion euros, while Galeria-Kaufhof went down 3.7% to 3.4 billion euros.