METRO, the world’s fourth-biggest retailer, issued a profit warning that sent shockwaves through the sector yesterday, saying Christmas trading had started slowly and the Eurozone debt crisis was undermining consumer confidence.
Shares in the German group, which runs cash and carries, hypermarkets, electrical goods and department stores, slumped over 13 per cent.
“We feel the resulting consumer restraint across all sales divisions and national borders,” outgoing chief executive Eckhard Cordes said in a statement.
Metro, world number four behind Tesco, France’s Carrefour and US industry leader Wal-Mart, said it expected both sales and earnings before interest, tax and special items to come in below 2010 levels, should weak Christmas trading continue.
Previously it had forecast earnings growth of at least five per cent, even without a good Christmas.
A Metro spokesman said shoppers were particularly holding back on purchases of consumer electronics and clothing, sold mostly through its MediaMarkt, Saturn and Kaufhof stores.
He said quiet sales last weekend, traditionally the second week of the Christmas shopping season, had prompted the profit warning from Metro, which usually waits until January to give details of Christmas trading.
Bernstein analyst Chris Hogbin said the warning did not bode well for rivals like Tesco, which reports third-quarter sales figures tomorrow, and particularly Carrefour, which is also highly exposed to Eurozone countries.
City A.M. Reporter