Metro sales hit by sluggish Christmas, forex impact

DUESSELDORF, Germany - German retailer Metro reported disappointing trading over the key Christmas period on Monday as it said sales for the last three months of 2013 fell 3.3 percent, also hurt by negative currency effects.

Europe's fourth-biggest retailer, which runs cash and carries, supermarkets, department stores and the region's top consumer electronics chain, reported sales for the first quarter of its 2013/14 financial year of 18.7 billion euros ($25.57 billion), a rise of 1.1 percent after currency effects and divestments.

The sprawling group which runs over 2,200 outlets in 32 countries but gets just over two thirds of sales from Germany and other western European countries, has been divesting non-core businesses, cutting prices at its cash and carries, as well as revamping product ranges and investing in its delivery arm.

Chief Executive Olaf Koch said in a statement the sales development was still in line with the company's guidance for "slight absolute sales growth" for 2013/14. Metro reports full figures for the first quarter on Feb. 11.

"Our new financial year got off to a solid start in spite of the still challenging economic backdrop; soft Christmas sales prevented a better development," Koch said.

The cash and carry business, which accounts for almost half of group sales, reported like-for-like sales grew 0.9 percent to 8.5 billion euros as trading in Germany and the rest of western Europe improved against the previous financial year.

However, Metro said it had closed down its two MAKRO cash and carry stores in Egypt, saying it saw no expansion opportunities due to "current affairs and the limited market position" in the country hit by political turmoil.

Metro shares jumped on Friday after a media report said family-owned conglomerate Haniel was considering pushing for a break-up of the group in which it owns a little over 30 percent. But they reversed most of the gains after a spokesman for Haniel dismissed the report.