News

interest as it comes only after a period of time when METRO Group has been facing a number of difficulties.

Thus, the announcement comes after a period where METRO Group both published its “Shape 2012” restructuring plan which among other things aims at maintaining staff at 300.000 globally and reduced its budget for expansion and development by 50 %. And the German retailer like other global retailers may have yet to experience the full impact of the global economic crisis. Thus, as history has demonstrated the working conditions may soon come under pressure and when it comes to working conditions and labour relations in China the forecast doesn’t look good.

Inserted below the full story from Financial Times:



Metro believes that Chinese demand for food and non-food wholesaling is strong enough to allow the German retailer to almost treble the business of its Metro Cash and Carry (MCC) chain in China in years to come.



Frans Muller, MCC chief executive and a member of the Metro Group board, said the unit had 38 sites and annual sales of €1bn ($1.3bn) in China.

“But I think we eventually have to aim for about 100 stores to give us the presence we want,” he said.



Although he stressed that Metro had scaled back its immediate expansion plans due to the global recession, his words underlined the determination of the world’s fourth-largest retailer to raise its profile in the huge Asian market.

Wal-Mart, the world’s biggest retailer, operates 99 “supercentres” in China, although MCC sees itself less in competition with the US group than with its subsidiary Sam’s Club. The wholesale club for retail clients has three units in China.



Mr Muller admitted the global crisis had “now arrived in all our markets”, hitting food and non-food sales and forcing MCC to look at its costs.

But he also said the crisis could “accelerate our growth-drive” as weaker local rivals failed.



MCC started wholesaling to Chinese restaurants, hotel and small-shop owners in 1996. It remains the only one of Metro’s three international units – MCC, Real hypermarkets and Media Markt electronics – with a presence there.

Media Markt, Europe’s biggest electronics retailer, announced a foray into China in March via a venture with Taiwan-based Foxconn Technology. A first store is set to open in 2010 and “potentially hundreds” could follow, it said.



Foreign expansion has made both units key to Metro’s fortunes. MCC has stores in 29 countries, contributing half of the group’s annual sales of €68bn. Media Markt, with sales of €19bn, was the big growth driver with new stores in eastern Europe.

Metro Group in past years set its sights on expansion in eastern Europe, and this was still a stated aim. But group chief executive Eckhard Cordes, at the helm since November 2007, is clearly also pushing growth in other regions.



Mr Muller said MCC had built up “clusters” of wholesale stores in three populous cities – Beijing, Shanghai and Guangzhou – and “wanted to fill out [its] networks in these regions”. Four more stores will open in China this year.

But he stressed that plans there would not eclipse ambitions in India, Pakistan or Vietnam – or eastern Europe. After success in Russia and the Ukraine, MCC will enter Kazakhstan this year. A first store will also open in Egypt.



Mr Muller said this growth reflected the fact that “more and more customers want a one-stop shop” instead of going to specialist retailers.



http://www.ft.com/cms/s/0/6f3253d8-277b-11de-9b77-00144feabdc0.html?ftcamp=rss