Metro AG, Germany's largest retailer, said it plans to invest as much as 300 million euros ($467 million) to open as many as 20 stores in Egypt, where the economic growth rate is almost three times that of Europe, Bloomberg reported.
Metro will open its first Cash & Carry wholesale outlet in Cairo this year and as many as 10 stores in the country in the coming three to five years, Metro Cash & Carry Chief Executive Officer Frans Muller said today at the World Economic Forum conference in Sharm el-Sheikh, Egypt. The company plans to open a further 10 outlets in the long term, he said.
``By entering the Egyptian market we are consequently pursuing our international expansion strategy and making an important step into the very promising region of the Middle East and North Africa,'' Muller said.
Growth in emerging markets helped Metro, Europe's third- largest retailer, boost first-quarter operating profit 14 percent even as domestic revenue weakened. Sales climbed 7.3 percent, increasing 22 percent in eastern Europe and advancing 0.9 percent in Germany.
``Sixty percent of revenue is made abroad and 72 percent of profit,'' Metro CEO Eckhard Cordes said May 16 at the company's annual general meeting. He said he expects an ``upward trend'' in the portion of revenue coming from outside Germany.
Egypt has a population of 81.7 million and a growing middle class. The economy expanded 7 percent last year as compared with 2.5 percent growth among the nations using the euro currency. Egypt will be the second Arab country that Metro has entered after Morocco.
``We think the growth rate in Egypt looks very promising,'' Muller said. ``We want to go into a market that is picking up.''
Carrefour, Europe's biggest retailer, operates three hypermarkets in Egypt, according to its Web site. Tesco Plc, Europe's second-largest retailer, has no operations in Egypt according to its Web site.
Metro plans to expand its Real hypermarket stores, which generate almost a fifth of the group's sales, by opening about 15 outlets a year in eastern Europe. The retailer also aims to add more than 50 consumer-electronics shops annually and may introduce its wholesale chain into ``several countries,'' Cordes said at the annual meeting, without being more specific.
The retailer has forecast sales will increase more than 6 percent this year, slowing from 2007's 8.5 percent gain as rising inflation erodes spending power in Germany and western Europe. Earnings before interest, taxes and ``special items'' will climb as much as 8 percent, below last year's 8.8 percent, it has said.