Could Amazon Be Prepared To Make A Move For Metro's Real? Analysis

By Steve Wynne-Jones
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Could Amazon Be Prepared To Make A Move For Metro's Real? Analysis

The news that Germany's Metro AG is planning to sell its Real hypermarket business has sent the rumour mill into a spin, with one leading analyst suggesting that the time could be right for Amazon to make its entry into Germany's bricks and mortar retail world.

Bruno Montyene of Bernstein Research said that while in many markets, an obvious buyer for a business like Real would emerge, "we don't see a natural industry buyer in Germany.

"The No. 1 retailer in Germany, Edeka, is more of a co-operative style operation, which would make it hard to buy Real. The No. 2 and No. 3 are the hard discounters, Aldi and Lidl, for whom the retail format does not fit.

"One retailer who might be interested," he added, "is Amazon. Germany's grocery e-commerce is very underdeveloped and Germany is a very important country for Amazon.

"However, whether Amazon is ready to do a second acquisition is an open question. The purchase price (~€1 billion) would not pose a hurdle at all."


Germany is Amazon's second biggest market after the US.

Planned Sale

Metro announced in a statement yesterday that it is planning to sell Real, with chief executive Olaf Koch hailing the "significant progress" the business has made over the past three years, with investments such as the Markthalle concept, and a series of store refurbishments.

"The foundation for a successful independent future have been laid," he added.

But as Montyene suggests, the Real business has been finding the going tough in recent years, and therefore a sale could be a while in coming.


"Metro have tried to sell Real in the past, but they were only able to sell the Eastern European business and could not find a buyer for the German business," he said.

Putting Real up for sale now would suggest that the management board think there may be an improved probability of sales (otherwise putting it up for sale again without success would damage likely management credibility). There is a potential argument that the new labour agreements make the business more saleable."

Future Strategy

Back in July, Metro CEO Koch said that the business had no plans to sell Real, telling German publication WirtschaftsWoche (WiWo) that following negotiations with unions, the business was now looking to the future.

"We are now at a point in which we can say: the company is successfully set up for the future," Koch said at the time.


"Now it's about successfully developing Real further and boosting the value potential of the new business model, the rapidly growing online market place and the more than 70 of our own properties."

© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: European Supermarket Magazine.

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