Food wholesaler Metro sees its losses piling up because of the Russian invasion of Ukraine. Since the war, the German group had to write off no less than 200 million euros. Fortunately, the hospitality industry in Western Europe is booming again.
Western Europeans are having a drink again…
The German Metro-group, also parent of amongst others Makro, thought it could breathe a sigh of relief now that the coronation measures have been lifted and the hotel and catering industry is finally reviving. Indeed, in the past six months, turnover rose again by 21.6% to EUR 13.8 billion. In the shops, sales increased by 13.7%, deliveries even grew by 68.2%. Online, meanwhile, accounts for 31 million euros, 164% more than last year.
Much has to do with strong inflation, but it is mainly the hospitality industry in Western Europe that gave Metro the wind in its sails. In the second quarter, sales in the region rose by 47.6%, outperforming pre-corona. Double-digit growth was seen in all Western European countries, with France, Italy and Portugal topping the 50% mark.
… while the war rages in the East
However, Western restaurant customers are not outweighed by the war in Ukraine, which is crushing Metro’s already red profit figures. The loss in the first half of the year was 89 million euros, compared to 32 million euros in the red a year earlier. The group is active in both Ukraine and Russia and says it will remain so, but is feeling the consequences.
In Ukraine, the company mainly had to write off inventories and is – euphemistically said – facing “operational decline”, while in Russia the rouble plummeted and there are supply problems due to Western sanctions. Metro already booked more than 200 million euros in war-related costs.
For the rest of the year, Metro now expects 9% to 15% sales growth and a slight increase in operating profit. At least, if the war situation does not escalate further. In Russia, Metro mainly fears the consequences of the sanctions: in the second half of this year, Russian consumers may continue to keep their fingers crossed and product availability will become an increasing problem.
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Food wholesaler Metro sees its losses piling up because of the war in Ukraine. Fortunately, the hospitality industry in Western Europe is booming again.
