METRO Essay ⋆ Business Essay Examples ⋆ EssayEmpire

METRO AG is the holding company of the METRO Group, an international retail company headquartered in Dusseldorf, Germany. METRO AG was formed through a merger of Asko Deusche Kaufhaus AG, Kaufhof Holding AG, and Deutsche SB-Kauf AG and became a public company on July, 25, 1996. The METRO Group employs approximately 280,000 people working at some 2,200 outlets in 31 countries in Europe, Africa, and Asia. Total sales for METRO for fiscal year 2007 were approximately €64.3 billion. Its 2007 sales from outside Germany represented 59.1 percent of revenues. The company is organized around four customer-centered sales brands and a group of shared-services companies. Its four brands are Metro Cash & Carry (wholesale), Real (food retail), Media Markt and Saturn (consumer electronics and appliances), and Galeria Kaufhof (department stores).

Retail Brands

Metro Cash & Carry operates some 619 locations totaling 4.9 million square meters of selling space across 29 countries and employs approximately 103,915 persons. Its total sales for its fiscal year 2007 were €31.7 billion. Metro Cash & Carry stores typically stock about 20,000 food items and 30,000 nonfood items. This self-service wholesaler began as Metro SB-Grossmarkte Gmbh & Co. KG in Mulheim/ Ruhr in 1964. This food and nonfood business is targeted at commercial customers such as hotels, restaurants, kiosks, caterers, small food retailers, hospitals, and institutions. The company tailors its assortment of offerings to each respective location and nationally based demand patterns. Its slogan is “from professionals to professionals.” Metro Cash & Carry also has a wholly-owned subsidiary C+C Schaper that involves wholesale plus a delivery service. This Hanover, Germany–based unit operates some 63 stores.

The METRO Group brand Real operates 350 hypermarkets throughout Germany and about 90 additional markets in Poland, Russia, Romania, and Turkey totaling 3.1 million square meters of selling space and employs approximately 54,734 persons. Its total sales for its fiscal year 2007 were €11 billion. Real stores typically stock about 80,000 food and nonfood items. Real was formed from the merger of several regional hypermarkets in 1992, and has expanded, in part through the acquisition of the Allkauf and Kriegbaum companies, Wal-Mart’s former German hypermarkets, and the Polish hypermarkets of Geant. The Real hypermarkets are targeted at young families with children and seniors (age 50+), segments particularly interested in value. The food offerings, with emphasis on freshness and quality, account for the bulk of Real sales, though it offers other typical hypermarket goods such as books, clothing, electronics, household goods, leisure products, shoes, sports products, and toys. As part of its customer-value orientation, Real was a founding member of the German PAYBACK bonus program, the country’s most successful customer loyalty system.

Media Markt and METRO Group Saturn are the leading European retailers of consumer electronics, totaling 2.2 million square meters of selling space and employ approximately 49,046 persons. Their combined total sales for fiscal year 2007 were €17.1 billion. Media Markt operates 508 locations in about 15 countries and Saturn operates 200 stores in nine countries. Media Markt stores offer a comprehensive assortment of about 45,000 items encompassing telecommunications, computers, photographic equipment, audio systems, and electrical appliances. The first Media Markt opened in Munich in 1979. The core concepts behind the brand were to offer customers a broad selection at permanently low prices, professional advice, repair services, and a guaranteed low price vis-à-vis its competitors, in a location close to a given city but away from parking limitations. In 1988, the brand was acquired by Kaufhof Warenhaus AG, which acquired Saturn consumer electronics stores in 1990.

Saturn offers a comprehensive assortment of about 100,000 items encompassing telecommunications, computers, photographic equipment, audio systems, and electrical appliances. Historically, Saturn stores were known for their extensive selection of music compact discs, some 60,000 titles available. Unlike Media Markt, Saturn stores are located in central downtown locations, as well as in shopping centers. Saturn’s 18,000-square-meter store on Hamburg’s Monckebergstrasse has been described as the world’s largest consumer electronics selling space. The first Saturn opened in Cologne in 1961. The two independent brands became part of METRO in 1996. MediaSaturn Holding Gmbh is headquartered in Ingolstadt, Germany. One unique aspect to both Media Markt and Saturn is the organizational structure in which each managing director of a store is a co-owner of the store, thus linking manager rewards to store success.

Kaufhof Warenhaus AG is the management company for the METRO Group’s department stores, operating 141 stores totaling 1.5 million square meters of selling space in Germany and Belgium and employing approximately 18,820 persons. The total sales for METRO Group’s department stores was €3.6 billion for fiscal year 2007. METRO Group department stores are mostly located in prime inner-city locations and are known for providing fashionable premium products and international brands, merchandise presentation, and customer service. Galeria Kaufhof began in 1879 in Stralsund, Germany. Inno, S.A. was the sole department store in Belgium when the 100-year-old retailer was acquired in April 2001, and subsequently all of its 15 stores were converted to Galeria Inno by 2004. The Galeria concept is targeted to consumers who are seeking shopping experiences centered on brands, fashion, and lifestyles combined with lavish merchandising and extraordinary service.

Services

METRO’s shared services units provide for centralized efficiency for its operating brands. Its cross-divisional service companies provide the following services: procurement, logistics, information technology support, advertising, real estate, catering, and invoice settling. These pooled services create synergies for the METRO Group that cut its costs.

METRO Group’s market capitalization of €18.7 billion makes it one of Germany’s largest corporations and places it on the DAX blue-chip index. Three principal shareholders, Franz Haniel, Schmidt-Ruthenbeck family, and Otto Beisheim, control 68.47 percent of the voting rights in METRO AG.

Bibliography:

Michael Cesarz, Manina Ferreira-Erlenbach, Murat Pulat, and Cornelia Tomerius, Meydan Shopping Square: A METRO Group Project in Istanbul (Jovis, 2007);
Icon Group, Ltd., METRO AG: International Competitive Benchmarks and Financial Gap Analysis (Icon Group International, 2000);
METRO Group, metro group.de (cited March 2009);
Anne-Lise Wang, Responsive Retailing and RFID Best Practices in Western European Retail: Metro Group Case Study (IDC Research, 2007).

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