Metro restructures Extra unit

Metro, the German retail group, is to restructure its Extra Food Stores unit, decreasing the number of outlets and thereby increasing profitability across the business.

Metro is to focus on 400 Extra stores with a surface area of between 1,000 and 4,000 square metres, and will introduce a new marketing concept to support the refocusing.

Some 20 stores currently operating under the Extra fascia but which are larger than 4,000 square metres will become part of the Metro Group's Real hypermarket chain, a format which the German company considers to be more appropriate for the larger stores. Profitability of these stores is expected to increase once they have become part of the Real fascia.

At the same time, some 70 stores with a floor space of less than 1,000 square metres will be sold to franchisees and converted to Metro's franchise fascias Bolle and Comet. The total number of franchises will double as a result, reaching 140 stores.

Finally, a further 20 stores which do not fit into any of Metro's other retailing formats, will be sold.

For those stores that remain under the Extra format, Metro will focus its efforts on improving the quality of the fresh food selection as well as increasing the share of non-food items and revamping store layouts.

Extra will also have a revamped management structure, with functions such as stock controlling, accounting and internal audit being combined and integrated into the respective departments at Real. The regional structure at Extra will be simplified and adapted to that operated by the Real chain. The Extra brand and the operating business will continue to be managed by Extra's directors, however.

Metro said that these measures would lead to cost savings of several million euros.