METRO Wholesale: Development in the selfservice wholesale trade sector2
The global development of the self-service wholesale trade sector in financial year 2018/19 is anticipated to remain positive, contrary to the general economic trend. We expect that the contribution of the individual regions will once again vary. This also applies to the regions in which METRO operates. Growth is stronger in Asia than in Europe.
In comparison to the reporting period, we expect financial year 2018/19 to exhibit further declines in sales for companies operating in the wholesale industry sector in Germany. In contrast, there is still potential for additional growth in the food delivery segment. Further sales growth is forecast for the food service sector, which represents an important customer group for METRO Wholesale.
The self-service wholesale trade sector in Western Europe is likely to increase in nominal terms in the forecast year after only slight growth in financial year 2017/18, especially in METRO countries Austria and Portugal. The food service sector is also expected to develop positively, especially in Portugal and Spain.
In Russia, we expect slight growth in the self-service wholesale trade sector. We assume that the increase in value added tax (VAT) at the beginning of 2019 will have an overall negative impact on consumer spending. Even if food is exempted from the VAT increase, price competition for food is expected to continue to be intense as a consequence of higher non-food VAT.
In Central and Eastern European countries, the self-service wholesale trade sector is expected to grow more strongly in financial year 2018/19 than in the previous year, especially in countries such as Turkey, Romania and Ukraine. Despite the difficult economic environment, we believe that the HoReCa industry sector, supported by increasing tourism, will grow in Turkey. We expect the HoReCa and Traders sectors to continue their strong growth momentum, particularly in Romania and Poland.
The self-service wholesale trade markets in Asia, in particular in India, but also in China and Pakistan, are forecast to deliver stable, high-level economic development in financial year 2018/19. In addition to the store-based business, the delivery business continues to be a positive growth driver in this region.
2 Source: Euromonitor, Planet Retail