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German Turnaround ‘Will Take A Little Longer’, Says Metro AG CEO

By Steve Wynne-Jones
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German Turnaround ‘Will Take A Little Longer’, Says Metro AG CEO

Turning around the performance of wholesaler Metro AG’s German operations is likely to take a “little more time”, with the country representing “one of the largest transformation cases in our portfolio”, according to chief executive Dr Steffen Greubel.

Greubel made the comments in a media call to accompany the publication of Metro’s full-year 2022/23 results, which showed that while sales in its home market went up by 3.5% for the year, adjusted EBITDA went down by €32 million.

“A lot of things in Germany are still at a level that is not fully ‘wholesale’,” Greubel explained, “so we have to make changes to the stores, [the] rate of fitting, investments, product range, FSD. All this is lagging a bit behind in Germany, to be honest, and we have to make sure that we accelerate the process.”

During the call, Greubel, who recently had his contract as CEO extended for another five years, outlined how he believes that Metro AG is on track to achieve €40 billion in annual sales by 2030, in line with its sCore strategy.

It is putting its efforts into bolstering its omnichannel capabilities, intertwining in-store, digital and delivery by making its footprint more efficient. For example, the group plans to cut underperforming SKUs from its physical stores in order to introduce multichannel fulfilment operations from said sites.

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“No other competitor can do what we do,” Greubel said, adding that Metro has ”a USP that is unequalled in the European wholesale business”.

Buy More, Pay Less

One of the recent successes for Metro has been its ‘Buy More, Pay Less’ – or ‘BMPL’ – proposition, which offers business owners discounts on bulk purchases. As Metro revealed in its full-year announcement, BMPL has seen a 25% increase in sales over the past year, with 75,000 SKUs now available under the scheme.

According to Greubel, however, while the current inflationary landscape has played a role in driving BMPL sales in recent months, it is a strategy that the group intends to continue long into the future.

“BMPL is a growth factor independent from inflation or external factors,” he told the media call. “Of course inflation and external factors are kicking in, but, in the end, the strategy is not to have anything to do with inflation. It’s independent from that.

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“Volumes in BMPL are growing, and we will continue with further optimisation because the level of BMPL is not the same in every country.”

Russian Turnaround

Russia has proven to be another challenging market for Metro, with full-year sales down by 13.6% and EBITDA down by €79 million. In its full-year statement, the group cited the impact of last year’s cyberattack, as well as a ‘reluctance to buy’ factor.

Commenting during the media call, Greubel said that he believes that the group’s performance in Russia “has reached the bottom”, adding that the group has seen signs of a turnaround in the first two months of its 2023/24 financial year, due to its ability to once again sell alcohol in the Russian market.

“We see that the decline of turnover seems to be stabilising in the first quarter,” he noted.

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