Metro performance boosted by forex
per cent for 2004, in line with analysts' expectations. But with
the figures boosted by positive exchange rates, the underlying
sales performance reflects ongoing difficulties in a number of
markets, writes Chris Jones.
Analysts Goldman Sachs called Metro's performance "somewhat disappointing", attributing it to "weak trading across most formats and European markets in the last week of the year".
The solid if unspectacular performance from the German retail market over Christmas was something of a surprise, the analysts said, given that trade associations in the recession-hit country had been issuing positive updates throughout December. Furthermore, the week after Christmas, which had an extra trading day compared to 2003 and had been expected to show good growth, was a major let down.
The beneficial impact of foreign exchange rates was amplified by Metro's continued expansion. International sales of €8.3 billion were up 10.4 per cent in the final quarter and now account for just under half of Metro's total turnover. There were strong volume performances from Poland and Romania during the quarter, the company said.
But the food operations continue to lag behind the electrical goods and DIY units also run by Metro, with the German retail operations Real and Extra in particular feeling the impact of the continuing recession. With a strong discount sector, pressure on food prices in Germany remained strong, and the two chains continued their year-long decline in like-for-like sales.
Metro does not give sectoral figures for its quarterly results, but GS estimates that like-for-like sales at Real dropped 2.5 per cent in the quarter, rallying after a 5.1 per cent decline in Q3, while Extra's sales fell 3.5 per cent, roughly the same as in the previous quarter.
