Metro Update

Metro Group - home to Media Markt and Saturn - have announced their preliminary and unaudited figures for 2009. Revenues in local currency grew by 0.2% to €65.5bn, but in constant currency, revenues declined by 3.6%. For MSH, the announcement said that:

In an overall challenging year, Media Markt and Saturn were able to strengthen their leading market position in Europe. Sales grew by 3.7% to €19.7bn [adjusted for currency, that would have been growth by 5.5%].

Tesco Update

Tesco's Christmas and New Year trading statement shows that group sales increased by 7.5% in constant currency [6.9% in actual exchange rates] in the six weeks to 9th January 2010. In the UK, online sales - in food and non-food - grew by some 20% in this period.

Carrefour Update

Yesterday, Carrefour published their full year results for 2009. Revenues in France were down by 2.8%; in Spain, they were down by 5.8%; in Italy, they were down by 4.7%; and in Belgium, they were down by 2.2%. But it was a different story in Carrefour's growth markets. In Latin America, revenues were up by 9.4%; and in Asia, revenues were up by 8.8%. But in the European growth markets - that's Poland, Turkey, Romania, Greece and Portugal, revenues were down by 6.6%. Somewhat astonishingly, Carrefour opened or acquired over 1,000 new stores in 2009.

Best Buy Update

Back on 8th January, Best Buy reported that for the fiscal month of December [which ended on 2nd January], revenues increased some 13% to $8.5bn. One year ago, for a similar five week period, revenues came in at $7.5bn. The holiday period is absolutely critical to retailers like Best Buy where these five weeks represent a little under 10% of the year in trading days, but a little over 20% of annual revenues.

Top Global Retailers

Deloitte has just published the 'The Global Powers of Retailing 2010'. It's their 13th edition. The league table of the Top 250 retailers in the world shows that five of the Top 10 now come from Europe:

Carrefour

Metro

Tesco

Schwarz [Lidl]

Aldi

And the leading technology specialists are as follows:

023 Best Buy

043 Yamada Denki

065 DSGi

091 Gome

106 Kesa

116 Edion

117 Yodobashi

125 Suning

131 Casas Bahia

136 Apple

145 Bic

148 Euroset

149 K's

159 Eldorado

181 Kojima

191 RadioShack

222 Joshin Denki

250 Best Denki

This list clearly doesn't not separate the MediaMarkt business from Metro, or the Fnac business from PPR. And it does not even include the two biggest European buying groups, Euronics and Expert. It is also important to note that while this is the 2010 list, it is based on revenue figures from 2008 [but they do separate retail revenues from non-retail revenues before creating their league table].

Media Markt's Chinese Venture

Earlier today, Metro confirmed that they will be opening their first Media Markt store in China this year, probably in Shanghai. Metro's Chinese operation is in a JV with Foxconn Technology Group, with Metro owning 75% of the jointly-owned business.

Online in France

According to recent article from Reuters, France still lags behind Germany and the UK when it comes to online consumer sales. Reuters quotes research from Forrester which estimates online sales in France at €25bn, in Germany at €31bn, and in the UK at €41bn. France is seen as a less mature online market than Germany or the UK partly because of its relatively slow transition over the past decade from its homegrown Minitel service to the World Wide Web. This is compounded by the fact that there are almost no online food sales in France - principally because home delivery is comparatively expensive in the more dispersed geography of France. One exception is Casino Guichard and its cdsicount site, although it mostly sells consumer electronics and entertainment products.

Kesa Down

Kesa Electricals - home to Darty, Comet and Menaje del Hogar - have published their interim statement for the six months ending 31st October 2009. Group revenues increased by 7.6% to £2.35bn. In constant currency, that equals an increase of just 0.1%. But on a like-for-like basis it equals a decrease of 2.5%. The real success story continues to be Darty where revenues increased by 12.2% and retail profit increased by 12.7%. At Comet, sales increased, but by just 3.6%, while retail losses improved from a loss of £8.1mn to a loss of £1.2mn. Nevertheless, overall group retail profits came in at £24.3, which means that Darty's profits represent over 180% of group profits.

Best Buy Europe

Carphone Warehouse has just issued its Q2 trading update. It explained that the demerger of Talk Talk and Best Buy Europe is still expected to happen by the end of March 2010. It also confirmed that Best Buy Europe remains on track to open its first Big Box stores in the Uk in Spring 2010.

Vertical Integration

Best Buy Store 291: Houston, Texas

The retail channel is usually considered to be the dominant route to market for the consumer electronics manufacturers. It's understood that they may add other products and services at the point of sale - cross-selling accessories, adding delivery and installation options, vying for post-sales warranty and service revenues. Building out the basket. Increasing their 'average transaction value'. But backward integration - competing with their suppliers - that's not generally the role of a 'channel partner'.

Best Buy is the giant of US electronics retailing. With the death of Circuit City earlier in the year, Best Buy is now far and away the largest specialist retailer in the US, with annual revenues expected to be not far short of some $50bn in its current fiscal year. But a story in the latest edition of [Bloomberg] Business Week says that:

Rather than waiting for electronics makers to ship Best Buy the same products its rivals get, [Best Buy's staff] are walking factory floors with executives from companies such as Hewlett Packard and Toshiba, influencing product development and design. [For example], the retailer is pushing suppliers to use standardised software and digital services so consumers can listen to music or watch movies on any device. And Best Buy set up its own venture fund to pour millions of dollars into start-ups from Silicon Valley to Asia. The goal is to shape development of new technologies in promising fields such as green vehicles, digital health, and home monitoring.

Needless to say, while it remains largely unspoken, the threat of significant 'channel conflict' is a serious possibility if Best Buy goes beyond the acknowledged [and generally accepted] route of supplying private label equivalents. By trying to find products which no one else stocks - either by doing deals with a few 'A Brand' manufacturers, or building its own products in untapped niches, or demanding product homogeneity to suit its own ends - Best Buy could be on a collision course with many of its key suppliers. And while Best Buy dominates the specialist retail sector for electronics, it has to be looking over its shoulder at the advances made by Wal-Mart and Amazon, both of which are making great inroads in the US consumer electronics business.