Successful Global Retailers: What We Can Learn From METRO, Walmart, Carrefour, Tesco

Successful Global Growers: What We Can Learn From METRO, Walmart, Carrefour, Tesco In an effort to channel funds into its struggling German home market, Metro Group is reportedly considering an exit from Egypt, Bulgaria, Kazakhstan and Japan, according to Bonno van der Putten, Restructuring and Turnaround expert and global head of retail at PE firm Monarch Capital Partners. Van der Putten states that international expansion is a high risk high reward proposition, and for the world’s largest retailers as the METRO Group it is absolutely necessary for growth. Sometimes they get is wrong, more often they are getting it right. Both Walmart and Carrefour have pulled out of Russia, says van der Putten. In addition, Walmart withdrew from Germany and South Korea; Carrefour left Algeria and Thailand; Tesco left Japan and is currently in the process of withdrawing from the United States; and, Metro left Morocco. Not every entry into a foreign country is successful. Local laws and restrictions sometimes can create unforeseen challenges. Sometimes there are local market dynamics that make good supply chain strategies impossible to operate. Sales in the retailer's home market of Germany grew by 1%, says van der Putten, to reach €6.1 billion in the first quarter of 2013, while international sales dropped by 2.2 per cent to €9.4 billion. Van der Putten says that there will be further changes to the METRO Group's approach to streamline the non-food product assortment as well as modifications to the management reporting structure. Van der Putten states that there will be increased emphasis on fulfillment - the complete process from point of sale through to the delivery of a product to a customer - with the Group soon to create a dedicated Fulfillment and Multi-channel department. Van der Putten says that David Martinez Fontano, formerly of Customer Management, is expected to head up this team as METRO looks to grow its e-Commerce operations and delivery offering as a driver for growth. Speaking at Metro AG's Annual General Meeting, which was held on 8 May 2013, chairman of the management board, Olaf Koch asserted that the Group was on track owing to strategic realignment efforts. Van der Putten said that Koch, despite a further tightening of market conditions, especially in Southern Europe, remains focused to increase sales and win market share in countries. During Quarter 1, the period from January to March 2013, the Metro Group generated sales of €15.5 billion, says van der Putten, which is a slight drop on results from the same period in 2012 of €15.6 billion. In part this is due to the shorter trading period in 2013, which had three fewer trading days than the prior year's quarter. Overall sales at the Group's Cash & Carry business dropped by 2.8 per cent to €7.1 billion, says van der Putten. However, Metro Cash & Carry saw its delivery sales climbing by 15.9 per cent to hit €586 million, a significant jump on the results from the same quarter in 2012 of €504 million. The Metro Group's Media-Saturn company, which sells electronics, both on-line and off-line and is composed of three retail brands (Media Markt, Saturn and Redcoon) saw its online sales increase by 60.6 per cent to €281 million, as to van der Putten. Sales at the Group's hypermarket division Real fell by 0.9 per cent to hit €2.6 billion in the first quarter of 2013. However, adjusting of the disposal of its Central & Eastern European operations - excluding Turkey - Real's overall sales development was positive. For 2013's financial year, Metro Group anticipates 'generally moderate sales growth (adjusted for portfolio changes) despite the persistently challenging economic environment'. The company's aim for the brand is "to secure leading market positions in the different market segments in as many countries as possible" , says van der Putten.