Real chairman Joel Saveuse, who was appointed in August, was due to unveil price cuts for the chain’s 300 leading food products and top 50 non-food products, as well as plans to strengthen its own-label strategy and advertising.
The chain intends to replace several brands with the Real banner and launch 800 Real private-label lines by the end of this year. Real will also launch a daily TV ad campaign to promote products with reduced prices.
Other crucial elements of the strategy include the implementation of a store refit programme and improvement or disposal of underperforming stores. In March, Metro revealed that 40 stores in Germany generated losses of between 40 million (£32.1 million) and 50 million (£40.1 million) last year.
Bernstein senior analyst Christopher Hogbin said that Real has revamped about 60 stores, which are generating a sales uplift of about 2 per cent. “That needs to be rolled out across the entire estate,” said Hogbin.
If the turnaround strategy at Real does not work, Metro may sell the chain, although a time frame is unclear. Hogbin said: “The chief executive [Dr Eckhard Cordes] has come in and said: ‘If we cannot fix it, we will sell it’.”
Real, which has 431 stores, made an EBIT loss of 16 million (£12.8 million) last year, which it attributed to high start-up costs in Eastern Europe.
Separately, Metro Group chief executive Dr Eckhard Cordes said this week that he would mull a flotation of its Media Markt-Saturn retail electronics division and that it would also consider cross-border acquisitions.
Such plans could lead to Media Markt bidding for troubled UK electricals group DSGi, observers believe.
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