3.1 Macroeconomic and sector-specific parameters
Global economy
The growth of the global economy was clearly positive in financial year 2018/19, even if it was noticeably lower than in the same period of the previous year. While the Eastern European and Asian regions continued to show stable growth, albeit below the previous year’s level, the Western European countries in particular recorded lower growth rates. In the economic sectors, the service sector contributed to stabilising growth. Barriers to economic development continued to result from the uncertainties in international trade, which, among other things, can be attributed to trade policy conflicts and protectionism, primarily triggered by the USA.
Germany
In financial year 2018/19, the German economy grew across all industries, albeit at a significantly slower pace than in the previous year. This development particularly affected the 2019 calendar year. The economic development was supported by domestic demand and the continued positive consumer behaviour. The latter was boosted by a low unemployment rate and higher wages. The service sector also contributed to economic growth, which somewhat cushioned the decline in the industrial sector. Inflation remained at a low level. Direct trade conflicts with the USA and the dispute between the USA and China remain risk factors – as does Brexit.
Western Europe
In Western Europe, the economic trend deteriorated increasingly compared to the previous year as well as over the course of financial year 2018/19. However, the weaker development in private spending of the export sector was partially offset by stable growth in the service sector.
Despite lower growth compared to the previous year, domestic demand was boosted by private consumption and by the continued good situation of the labour market. Price inflation was low in most countries during the reporting period, particularly in Italy and Portugal. The impact of Brexit has not yet been directly felt in the rest of Western Europe.
Russia
The Russian economy grew in financial year 2018/19, albeit at a much slower pace than in the previous year. Exports in particular collapsed and the rouble remained weak despite a slight appreciation against the euro, partly as a result of US trade restrictions. In addition, inflation rose considerably. Domestic demand and private consumption grew more slowly than in the same period of the previous year. The labour market, on the other hand, continued to develop positively. Other negative influencing factors included the increase in value added tax and pension cuts.
Eastern Europe
In the other Eastern European countries, growth was noticeably stronger than in Western Europe, albeit slightly lower than in the same period of the previous year. The downturn was particularly affected by Turkey, which was in the middle of a recession. Growth in the region was also reflected in private consumption, which, with the exception of Turkey, was supported by very good labour market development, for example in Poland, Hungary and Romania.
The inflation rate and the exchange rate against the euro developed differently in the countries, but overall at a stable, moderate level. Turkey, however, was excluded from this development.
Asia
Economic growth in Asia remained at a high level, albeit slightly below previous year’s level. China in particular remained on a steady growth course despite the trade conflict with the USA. India and Malaysia also exhibited strong development. Growth in private consumption was quite stable and the labour market situation remained positive.
|
20181 |
20192 |
||||||
|---|---|---|---|---|---|---|---|---|
|
||||||||
World |
3.6 |
2.9 |
||||||
Germany |
1.5 |
0.6 |
||||||
Western Europe (excl. Germany) |
1.9 |
1.3 |
||||||
Russia |
2.3 |
1.1 |
||||||
Eastern Europe (excl. Russia) |
4.1 |
3.6 |
||||||
Asia |
5.6 |
4.9 |
||||||
Wholesale sector development
On a global scale, self-service wholesale trade sales were at a similar level to the previous year; however, the development varied across the countries in which METRO operates. The sectors of our core customer groups HoReCa and Traders developed positively again compared to the same period of the previous year. Strong growth in out of home consumption across all METRO regions played a major role in this trend.
In Germany, self-service wholesale trade growth stagnated in financial year 2018/19. By contrast, the delivery sales business continued to grow strongly. Compared to financial year 2017/18, sales growth in the HoReCa and Traders sectors increased to a good level. This was driven by a particularly strong increase in out of home consumption and an increase in overnight accommodation services.
In Western Europe, self-service wholesale trade recorded stable growth slightly below previous year’s level, with Austria and Spain growing particularly strongly. Self-service wholesale trade also continued to develop steadily in France, albeit below previous year’s level. Growth in the HoReCa and Traders sectors accelerated as a result of the increased trend of out of home consumption.
After a downturn in the previous year, self-service wholesale trade in Russia recorded growth again in financial year 2018/19. The sales of our customer groups HoReCa and Traders also developed positively.
Across Eastern Europe, self-service wholesale trade as well as the HoReCa and Traders sectors the development varied. Turkish self-service wholesale trade stagnated despite high inflation, while the HoReCa and Traders sectors continued to grow. Romania and the Ukraine experienced high growth in all areas. In Poland, the cash & carry market grew, with both the HoReCa and Traders sectors showing growth.
The Asian markets in which METRO operates outperformed financial year 2017/18. Growth in cash & carry and the HoReCa and Traders sectors in India accelerated particularly strongly. In Pakistan, the HoReCa and Traders sectors also grew significantly faster than in the previous year. In Japan, the HoReCa and Traders sectors recovered compared to the previous year and showed slight growth.