кейси для індивідуальної роботи 2014 н.р. / METRO AG IN RETAILING (WORLD)

INTERNATIONAL STRATEGY

Western Europe: Resilient sales in challenging market conditions

MULTI-CHANNEL STRATEGY

Electronics and appliance specialist dominates group sales

The proportion of Metro’s global company sales derived from the electronics and appliance specialist channel rose from 50% in 2006 to 57% in 2011. This was mostly driven by expansion in Western Europe, outside Germany, as well as in Eastern Europe. Meanwhile, the proportion of sales through hypermarkets rose slightly, from 29% to 31%% over the same period, although Metro’s presence in the channel is more confined to its mature domestic market. The increase was mostly due to the company existing the supermarkets channel in 2008, which boosted the share of all other channels.

The proportion of sales through internet retailing became significant at 2% in 2011, following the acquisition of the pure-play internet retailer Redcoon, although it remains modest compared to Casino (3%) and Tesco (4%). It is expected to rise rapidly as Metro expands into the channel with Media Markt and Saturn, although this will to some extent lead to a cannibalisation of the company’s store-based sales.

Metro AG: Retailing Presence and Growth Prospects by Channel 2011-2016

Note: Bubble size shows company sales in this channel in 2011). Range displayed: US$802-28,525 million

MULTI-CHANNEL STRATEGY

Electronics and appliances specialists: Robust sales in Europe

An increasingly challenging channel in Europe

Sales through its Media Markt/Saturn stores in Germany were disappointing in 2011. The brand suffered from growing competition from internet retailers selling media products and consumer electronics and the poor economic prospects for the Eurozone, which hit consumer confidence in the second half of 2011.

Despite a similarly difficult environment in Western Europe, Metro’s sales were resilient, and continued to benefit from the lack of any rival of a similar size within the electronics and appliance specialists channel. Its main regional rival, UK-based Dixons, only operates in Ireland, Italy and the Nordic countries, while Euronics, which is present throughout Europe, focuses on smaller high street-based stores in small to medium-sized towns. Hence, it targets a different customer base to Metro’s big box outlets.

The withdrawal of US-based Best Buy from Turkey and the UK in 2011, after a brief spell in these markets, illustrates the highly challenging conditions in the channel in Europe and the pressures being placed on Metro’s margins. Despite its service expertise and the global scale of its operations which could support aggressive pricing strategies, Best Buy did not succeed in establishing a solid brand image and promptly halted its plans to enter other European markets. Best Buy’s weaker position in the US, affected by the rise of pure-play internet retailers, notably Amazon, also undermined its ability to expand internationally.

MULTI-CHANNEL STRATEGY

Hypermarkets: Metro continues to lose ground in key markets

MULTI-CHANNEL STRATEGY

Department stores: No disposal, focus on multi-channel synergies

Disposal of Galeria Kaufhof on hold

Metro operates Galeria Kaufhof department stores only in Belgium (Galeria Inno) and Germany (Galeria Kaufhof). The difficulties at rival Germany-based Karstadt, following its bankruptcy in 2009, which resulted in store closures, have propelled Metro to the number one spot in the channel in Germany.

After negotiations with Karstadt’s private equity owner Nicolas Berggruen in the first half of 2011 failed to reach a deal on a disposal that would have seen the merger of Galeria Kaufhof and Karstadt to create a dominant operator in the German market, Metro’s CEO Olaf Koch stated in January 2012 that the plan to sell the division was on hold. Although Metro is likely to have received offers for the chain in late 2011 from other private equity groups, the company could not obtain bids that met its expectations. It is estimated that Metro values the chain at between €2 billion and €2.5 billion.

Group synergies and potential recovery of Galeria Kaufhof

Although the profitability of the division was modest in the first three quarters of 2011 and it could record a loss over the whole year following a difficult last quarter, Galeria Kaufhof stores allow Metro to achieve synergies with other group operations. For example, Galeria Kaufhof benefits from a well-known loyalty scheme integrated into the Payback scheme also used by Real hypermarkets, which has around nine million members in Germany.

Store remodelling implemented at some locations in 2011, including the phasing out of low-margin technical products and supported by new fashion ranges, could have a negative impact on profits in the short term, but could help department store sales recover in the longer term, especially following the reduction of Karstadt’s presence.

Key Point: With a relaunched internet retailing site in October 2011 Galeria Kaufhof has boosted multichannel synergies through click-and-collect services and the ability to return goods to its stores.

MULTI-CHANNEL STRATEGY

Internet retailing: Growing presence but faces challenges to expand

Metro’s presence in internet retailing remained modest in 2011, despite the acquisition of the pure-play consumer electronics internet retailer Redcoon, which operates in 10 European markets.

Metro expects internet retailing sales to reach €5 billion in 2015. While the acquisition of Redcoon and the launch of Media Markt and Saturn sites in Germany will give internet retailing a considerably larger scale, this ambitious target may not be achievable without further large acquisitions. However, such transactions would likely be vetoed by Media Markt’s founder Erich Kellerhals, who fears the cannibalisation of storebased sales and blocked deals to acquire two small internet retailers in summer 2011.

Media Markt and Saturn finally in internet retailing in Germany; battles pure-play retailers in Europe

Market entries for the Media Markt/Saturn brands in internet retailing for physical goods in Europe included Spain in May 2011, with a click-and0collect service, Germany in October 2011 for Saturn, in January 2012 for Media Markt, following launches in Austria and Switzerland in 2010. The relaunch of the German sites was initially planned for 2010 but was delayed. This was partly due to the division’s decentralised business model requiring a complex pricing structure, with customers registering at their local store, which enables the brand to differentiate promotions and prices according to the customer’s location. While this strategy appeases store managers, it is likely to create extra costs and limit the flexibility of the online operations.

Competition from pure play internet retailers with lower overhead costs, notably Amazon, is set to intensify, with the US-based retailer entering Spain and Italy through dedicated sites in 2011. In a bid to match these players’ prices, Metro plans to cut costs by 2-3% by 2014 by reducing its workforce and marketing costs.

Key Point: With the coexistence of Redcoon and Media Markt/Saturn in internet retailing, Metro will need to reposition both brands in order for them to complement each other instead of being direct competitors. Beyond a differentiated product offering, the focus on click-and-collect services and dedicated promotions should be used to avoid internet retailing sales negatively impacting footfall at Media Markt/Saturn stores.

MULTI-CHANNEL STRATEGY

Internet retailing: Metro to tread carefully to win from download rise

 While the group will attempt to offset this through a greater focus on digital downloads, which offer potential for higher margins than physical media products, these shifts in consumption trends could force a rethink of

Media Markt/Saturn’s internet retailing strategy.

Key Point: As Media Markt/Saturn attempts to minimise download sales cannibalising sales of physical media products, both in stores and through internet retailing, while also seeking to increase revenues of media downloads, it could benefit from boosting promotions and loyalty schemes which would give incentives for shoppers to purchase both physical media and downloads.

MULTI-CHANNEL STRATEGY

Internet retailing downloads: Metro fully joins the digital revolution

Metro follows in the footsteps of Apple and Best Buy with a wide range of media download services

In June 2011, in Germany, Metro launched a new games download service through the Media Markt site. The move, which follows the launch of a film and TV series download site in summer 2010, makes mediamarkt.de the first major website in Germany to provide a full range of downloadable media products, covering e-books, films, games, music and software.

In order to benefit from downloads, Metro introduced in September 2011 the MyJuke subscription streaming service in Austria and Germany, through the Media Markt and Saturn sites, giving access to a library of 15 million tracks for €9.99 and linked to mobile phone applications. However, the difficulty of establishing powerful brands in the download subscription arena was highlighted by Best Buy’s decision in October 2011 to sell the Napster brand, which it had purchased in 2008 but failed to turn it around.

These initiatives give Metro a stronger position than most other European retailers in the attempt to challenge Apple’s undisputed dominance for media downloads though its iTunes sites. However, Metro will struggle to build brand awareness in this arena in order to become a significant player.

As a result of the launch of the group’s other internet retailing operations to sell physical products in 2011 and early 2012 in several European markets, Metro’s download websites are likely to benefit from increased web traffic and generate higher revenues.

Key Point: The rapidly growing usage of mobile devices, including e-readers and tablets, for reading books in Europe could prompt Metro to set up a partnership with an e-reader manufacturer to produce a private label device. Amazon with Kindle and Rakuten with Kobo are examples of internet retailers that have successfully used such a strategy to drive sales of e-books and strengthen customer loyalty.

MULTI-CHANNEL STRATEGY

Cash-and-carry: Steady expansion in emerging markets

 Outside the remit of Euromonitor International’s retailing coverage, Metro’s cash-and-carry operations, under the Makro and Metro brands accounted for 47% of the group’s revenues in 2011. Sales from the domestic market accounted for only 16% of total sales in 2011. Metro further reduced its exposure to the German market in 2011 with the closure of 10 outlets, following seven closures in 2010. The group plans to open 40 new cash-and-carry outlets in 2012, almost exclusively in emerging markets.