METRO GROUP has a number of opportunities for future sustainable business development that also extend beyond the 2-year period covered in the forecast report. Global trends also play a role here. In particular, we see opportunities being created by new sales channels, by demographic change in the mature markets of Western Europe that have aging populations and by the continuing growth of the population in developing and emerging countries, a trend that will produce many new needs. Our sales lines analyse these trends and take decisions aimed at systematically exploiting opportunities of the future.
Opportunities from the development of business conditions
In contrast to Southern Europe and some countries in Eastern Europe, many other regions and countries have rebounded since the worldwide financial crisis subsided. Above all, Asia and Russia exhibited a very strong and promising development in 2012. Our sales and earnings could profit from a further improvement in the business situation. Demand – including for the long term – is rising in countries with growing populations. METRO GROUP does business in many markets where we can benefit from this trend.
Strategic business opportunities
Our sales lines have high levels of brand equity in the countries where we do business, and we have assumed leading positions in most of the markets. We must further strengthen and expand these. Developments of recent years have shown that weak market players must pull out or be put up for sale. Because this market share has to be redistributed, we are working to fill these gaps or, when reasonable, to take over the individual locations of competitors.
A major opportunity is being created by online sales. This channel enables us to reach new customers who consider online shopping to be a convenient alternative. All our sales lines have online shops in Germany and many other countries. Unlike strictly online providers, our multichannel approach creates real added value for customers. We expect to see market players in both the stationary and online business drop out.
Demography offers a tremendous opportunity for METRO GROUP. The population of Western Europe is aging, and customer needs are being shaped by this trend. Our sales line Galeria Kaufhof has already won several awards for the approach it is taking to focus on all age groups and to meet the needs of older people. The stores of our sales lines are easy to reach and, as a rule, are located on the ground level. In addition, the outlets offer assistance and products designed to meet the needs of customers from all generations.
Business performance opportunities
In addition to general cost cutting, we are creating a foundation for long-term success by increasing our productivity. This effort includes a number of projects that we have already initiated and will now systematically continue to pursue. As a result, we will continue to expand our delivery activities and increase the share of high-margin own-brand products in total sales.
In addition to cost components, quality is a critical differentiating factor that is particularly relevant for food. Using employees who continuously check and ensure quality, we can gain an edge on our competitors and create customer perception that will have a positive effect on sales and earnings.
Additional opportunities will arise from efforts to cut our greenhouse gas emissions. In this area, we have set a goal that will indeed require investments, but that will save money in the end by lowering energy costs. In turn, these savings will create an array of financial and environmental benefits and improvements. By 2020, we intend to reduce greenhouse gas emissions by 20 percent per square metre of selling space compared with the levels of 2011.