METRO Wholesale: Development in the selfservice wholesale trade sector2

The global development of the self-service 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 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 , especially in countries such as Turkey, Romania and Ukraine. Despite the difficult economic environment, we believe that the industry sector, supported by increasing tourism, will grow in Turkey. We expect the HoReCa and 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

Wholesale, METRO Wholesale
The METRO Wholesale segment comprises the METRO Wholesale sales line of METRO AG with more than 769 wholesale stores across 35 countries worldwide. This also includes the delivery business (Food Service Distribution) with companies like METRO delivery service and the delivery specialists Classic Fine Foods, Pro à Pro and Rungis Express.
Glossary
Wholesale, METRO Wholesale
The METRO Wholesale segment comprises the METRO Wholesale sales line of METRO AG with more than 769 wholesale stores across 35 countries worldwide. This also includes the delivery business (Food Service Distribution) with companies like METRO delivery service and the delivery specialists Classic Fine Foods, Pro à Pro and Rungis Express.
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Previous year
Period of 12 months, usually cited as reference for statements in an annual report.
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HoReCa
Short for hotel, restaurant and catering businesses. The HoReCa segment is an important customer group for METRO Wholesale.
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Traders
The term ‘Traders’ at METRO Wholesale refers to the customer group of independent resellers such as operators of small grocery stores and kiosks, street food vendors, gas stations and wholesalers.
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Retail
The Real sales line of METRO AG operates in the food retail sector and is a leading hypermarket operator in Germany with 279 stores.
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