Germany’s Metro warns of difficult year ahead

Berlin: German retail giant Metro warned that it faces a difficult business year ahead, despite a solid gain in quarterly profits and signs of a Christmas shopping boom in Europe’s biggest economy.
The Dusseldorf-based company said its earnings before interest, tax and special items climbed 3.2 per cent to 1.56 billion euros ($1.7billion) in its fiscal year ending September, compared with the same period in 2015.
The results sent Metro’s shares about 5 per cent higher in early trading on the Frankfurt stock exchange.
Quarterly profits to the end of September rose to 568 million euros from 435 million in the same period last year, said Metro, which has operations in 29 nations.
But Metro warned that its business outlook “will be shaped by the persistently challenging economic environment, with political developments adding to economic challenges.”
The release of Metro’s latest results came in the build-up to Christmas, with the Federation of German Retailers (HDE) expecting shoppers to splurge a record 90 billion euros — a rise of 3.9 per cent compared with the holiday shopping season last year.
“The customers are often particularly interested in watches and jewellery, household goods as well as high-quality food,” said HDE chief executive Stefan Genth this week.
Signs that German shoppers are splashing out this Christmas backs up economists’ forecasts that consumer spending will be a major driving force behind the nation’s economic growth rate this year — thanks to low unemployment, ultra-low interest rates, higher wages and weak inflation. — dpa