July 13, 2018 / 7:45 AM / 9 months ago

Metro has no plans to sell Real hypermarket chain, CEO tells magazine

BERLIN (Reuters) - Retailer Metro (B4B.DE) has no plans to sell its German hypermarket chain Real, Chief Executive Olaf Koch told a magazine in an interview published on Friday.

FILE PHOTO: German retailer Metro AG sign is seen on the steps of their headquarters in Duesseldorf, Germany March 02, 2018. REUTERS/Thilo Schmuelgen/File Photo

Metro, a sprawling conglomerate, has spent several years restructuring and selling businesses, such as its Kaufhof department stores, to focus on its cash-and-carry business and Media-Saturn electronics chain.

It has split its food business from its consumer electronics business, which it has renamed Ceconomy (CECG.DE).

“We are now at a point in which we can say: the company is successfully set up for the future,” Koch told WirtschaftsWoche (WiWo) magazine when asked how long Metro would keep Real.

“Now it’s about successfully developing Real further and boosting the value potential of the new business model, the rapidly growing online market place and the more than 70 of our own properties,” he said.

A trial of a “market hall” concept at a Real store in Krefeld, Germany has boosted customer traffic by 30 percent, Koch said.

About 30 of Metro’s 280 Real stores could be suited to the market hall model over the medium-term, while other stores could incorporate individual aspects of the model, he said.

His comments come as labor union Verdi calls on 34,000 workers at Real in Germany to strike in protest at a wage agreement that the struggling chain pursued as a way to cut staff costs.

In its financial year to Sept. 30, Metro’s 282 Real outlets posted a 3.1 percent decline in sales and a 24 percent drop in operating profit.

Koch also said in the interview that Metro remained committed to its Russian business despite a poor performance, which has weighed on its share price.

“Metro Russia continues to be a cash cow in our portfolio. The Russian market offers enormous growth potential,” he said.

Metro has overhauled management at its Russia business and is introducing bulk discounts to attract more independent traders and restaurant owners.

Reporting by Caroline Copley; Editing by Edmund Blair

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