BERLIN, GERMANY - Word on the street is that German retailer Metro AG has plans to sell its hypermarket chain Real, which has been struggling recently. The chain is worth $1.2 billion, and the sale of Real could attract interest from heavy-hitting buyers, such as Amazon, according to some analysts. After Whole Foods was taken under Amazon’s wing for $13.7 billion last year, the e-commerce giant could be interested in taking on additional food retailers.
According to a report from LiveMint, potential buyers have been leery to enter the German grocery market since Walmart took a loss of $1 billion after it sold its stores to Metro. The retailer subsequently pulled out of the country in 2006.
“Germany’s grocery e-commerce is very underdeveloped and Germany is a very important country for Amazon,” said Bernstein analyst Bruno Monteyne, adding that a likely price tag of around $1.2 billion would be of little consequence to Amazon.
Metro AG CEO Olaf Koch said earlier talks with interested parties had not come at the right time as Metro began restructuring its business. The retailer said that it wanted to focus on its wholesale business, which serves independent traders, hotels, and restaurants and is more shielded from e-commerce, while doing more delivery to customers. LiveMint reported that the wholesale food business has higher margins than grocery retail, and is growing faster as people spend more on eating out rather than cooking at home.
Koch also pointed out that Metro had seen “express interest from a number of parties,” but that the sale process could take up to eight months.
An Amazon spokesman has declined to comment.
Will the sale of Metro’s Real signal to Amazon that more opportunities in grocery await? AndNowUKnow will keep you updated with the latest growth in our industry.
