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Praktiker substantially raised non-German<br />
sales to DM 305 million (up by 22.5 percent)<br />
through its expansion into Austria and the opening<br />
of another home improvement center in<br />
Luxembourg.<br />
The number of Praktiker home improvement<br />
centers rose by 38 to 222. Apart from 13 new<br />
stores, 27 outlets acquired from Spar strengthened<br />
the network of Praktiker branches in hitherto<br />
underrepresented regions of western Germany<br />
such as Hamburg and the Rhine-Ruhr area.<br />
Two stores were closed. Total selling space expanded<br />
appreciably by 171,200 m² (up by 18.6<br />
percent) to a total of 1,091,400 m².<br />
Result from ordinary operations receding<br />
The result from ordinary operations fell by 15.0<br />
percent from DM 220.0 million to DM 186.9 million.<br />
The drop in earnings is the result of lower<br />
sales on a same-space basis as well as the preoperating<br />
and start-up expenses involved in<br />
opening new centers. Expenditure on penetrating<br />
the Austrian market was in line with targets,<br />
whereas the acquisition of the Spar home improvement<br />
centers led initially to slight pressure<br />
on income.<br />
Capital expenditure rises clearly owing to<br />
takeover of Spar home improvement centers<br />
Capital expenditure in fiscal 1996 totaled DM<br />
86.4 million. Apart from the opening of 13 new<br />
stores, 7 existing home improvement centers<br />
were refurbished. Goodwill rose by DM 105 million<br />
from the acquisition of Spar home improvement<br />
centers.<br />
<strong>METRO</strong> <strong>AG</strong><br />
Additional information<br />
Higher number of employees and proportion<br />
of part-timers<br />
Because of the opening of new stores, the absorption<br />
of Spar home improvement centers<br />
and expansion abroad, the average number of<br />
employees, translated into full-timers, rose to<br />
10,213 in 1996. The proportion of part-timers<br />
was further raised to a scheduled 25.6 percent<br />
of full-time staff as part of the flexible staff<br />
deployment strategy.<br />
Price leadership expanded thanks to redefined<br />
advertising strategy<br />
Praktiker is further expanding its price leadership<br />
in the do-it-yourself market with an<br />
advertising strategy which was redefined in<br />
mid-November 1996, combining aggressively<br />
priced special offers with an attractive and comprehensive<br />
range of products. Praktiker is thus<br />
addressing consumer weakness for special offers<br />
in the do-it-yourself and home improvement<br />
sector, which has less price transparency than<br />
the food trade. The measures taken are starting<br />
to impact favorably on sales in the current fiscal<br />
year.<br />
Internationalization enjoys strategic priority<br />
Internationalization of the Praktiker concept enjoys<br />
priority as part of a medium-term growth<br />
strategy. Having accessed the Luxembourg and<br />
Greek markets, Praktiker is steadfastly continuing<br />
its international expansion in Austria with<br />
the opening of additional home improvement<br />
centers in 1997. Sales trends confirm the competitiveness<br />
of Praktiker sales outlets even in<br />
an international context. In years to come, further<br />
expansion to 15 locations in Austria’s urban<br />
centers is planned.<br />
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