German retail giant Metro AG has announced that it is lowering its sales and earnings guidance for the year, against the backdrop of a weak start to Christmas business in many European countries, negative currency effects and the 'increasingly noticeable' effects of the EU debt crisis on economic development and consumer confidence.
The group said that, assuming weak Christmas trading continues, sales are forecast to come in slightly below 2010 at €67.3bn, while earnings before special items are also expected to drop fractionally to €2.4bn.
'Originally we had expected that, based on the weak prior-year basis, this year's Christmas business would grow,' said Eckhard Cordes, CEO at Metro. 'However the start to Christmas business has so far distinctly lagged behind the prior year level.
In many European countries consumers are very anxious in view of the growing sovereigndebt crisis, higher unemployment rates and austerity programmes,' Cordes added. 'In addition, leading economic research institutes are of the opinion that the already negative general environment for the national and global economy has further deteriorated during the past weeks.
'We feel the resulting consumer restraint across all sales divisions and national borders. We will now make every concerted effort to generate earnings for the year on the same high level as in the previous year.'
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