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METRO GROUP : ANNUAL REPORT 2010 : BUSINESS
→ GROUP MANAGEMENT REPORT : 11. RISK REPORT
METRO GROUP to further strengthen its Internet sales channel
so it does not leave competitors any room to gain market
share. For this reason, we are tirelessly working to expand
and improve our sales divisions’ online presences. An important
factor for the success of Internet retail is fulfilling logistics
and IT requirements to guarantee fast, dependable deliveriesaswellasensuringsecureandeasyorderingprocedures.
At the same time, it is important to dovetail stationary business
optimally with Internet retail.
Risks related to business performance
Suppliers
As a retail and wholesale company, METRO GROUP depends
on external providers for the supply of goods and services.
we place a high priority on both the quality of the supplied
goods as well as on the reliability of our suppliers. defective
or unsafe products would cause extensive damage to the
image of METRO GROUP and pose a long-range threat to the
Company’s success. For this reason, we select our suppliers
carefully. They are continuously monitored and have to adhere
to the procurement policy standards of METRO GROUP. In
particular, these standards include those tested by the
Global Food Safety Initiative like the International Food
Standard and the GLOBALGAP certification for agricultural
products. They help to ensure the safety of foods on all cultivation,
production and sales levels. To prevent disruptions
in the supply of goods and to avoid becoming dependent on
individual companies, we work with a variety of suppliers. By
taking this approach, we ensure that the desired product is
practically always in stock and, in the process, achieve high
levels of customer satisfaction.
The success of METRO GROUP also depends heavily on the
procurement prices of the products offered for sale. Our
purchasing volume in the numerous countries where we do
business has a major impact on procurement prices. Just
like all other retail and wholesale companies, though, we
constantly face the risk that shortages of resources could
occur and drive up the prices of raw materials and foods. For
instance, increased oil prices can lead to higher procurement
prices for a variety of products.
IT and logistics
The highly diverse selection of goods in bricks-and-mortar
retailing and the high stock turnover entail fundamental
organisational, IT and logistics risks. METRO GROUP’s
international focus and concentration on national, regional
and local product assortments add to these risks. Any dis-
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ruptions in the supply chain, for example in the supply of
goods, could lead to business interruptions. we reduce our
dependency on individual suppliers and service providers by
expanding our circle of business partners and employing the
principle of efficient assignment of responsibilities. Because
important business processes, including product ordering
and sales, use IT systems, continuous availability of the
infrastructure is also a critical factor. For this reason, systems
that are essential to business operations are largely selfcontained
and can always be used even during events such
as network failures. The same is particularly true for the
checkout systems in stores and locations. working hand
in hand with computing centres, efficient and secure networks
ensure that major system failures caused by such
events as natural disasters or criminal acts can be overcome.
In our work on IT security, we also ensure a high quality
of the processed data. These data may be viewed only by
authorised staff. The necessary user accounts and access
authorisations are administered according to a predefined
planning process. The core processes and systems of
METRO SySTEMS are checked by external inspectors and
also by a department of Internal Audit that specialises in IT
auditing procedures.
Human resources risks
The expertise, dedication and motivation of our employees
are key success factors that have a decisive impact on our
competitive position. One prerequisite to achieving strategic
goals are highly qualified experts and managers. It is an
ongoing challenge to recruit and retain such valuable employees
for the Group, in particular in the face of demographic
change and intense competition for the best people. This
makes in-house qualification measures indispensable. To
foster the requisite entrepreneurial skills among our employees,
we optimise training and professional development programmes
for employees at all levels. Training courses and
systematic measures that help employees to grow in professional
terms promote entrepreneurial thinking and actions
among employees. variable and performance-based pay
components serve as an incentive. direct participation in
business success increases employees’ identification with
METRO GROUP and enhances their awareness of risks and
opportunities in all entrepreneurial decisions.
More information on METRO GROUP’s human resources policy
can be found in the chapter Employees on pages 96 to 102.