Media-Saturn CEO on consolidation, foreign expansion, Best Buy and e-commerce

In an interview with Süddeutsche Zeitung, the banner director of Metro Group’s Media-Saturn consumer electronics division, Roland Weise, has predicted a wave of consolidation in the European consumer electronics retail sector, in the wake of the current economic troubles. Weise said: "Our third quarter was difficult, especially August, but business started improving again in September and October. However, many of our competitors in Europe are facing great difficulties. Some cannot pay their suppliers. The first domestic chains in Spain and Hungary have closed down. I’m convinced that our business sector is moving towards one of the largest waves of consolidation ever." Speaking about some competitors, Weise gave details on the extent to which Eldorado in Russia imitates the appearance of Media Markt, saying that "they actually went to our stores in Munich and Vienna, took pictures of everything and copied the concept in Russia. They copied both our store layout and advertising campaigns."

Weise admitted that Media Markt had made mistakes in the early stages of Russian expansion, including the buying of non-optimal product ranges, but said that these problems had been solved now. In terms of further expansion abroad, Weise underlined that the retailer had extensively studied a number of countries but added that "under the current circumstances, it wouldn’t be wise to launch any large-scale and difficult expansion projects". Commenting on Best Buy’s imminent superstore expansion into Europe, Weise said: "If our American competitor enters Europe, it will see how complicated this multi-cultural continent is when compared with America. Every few hundred kilometres, people speak a different language, legal and tax systems differ along with consumer mentalities." Finally, speaking of Media-Saturn’s e-commerce activities that were tested in 2007, Weise said: "Media Online was an experiment, and it did fail. But you’ve got to try something new and take a risk occasionally. Our initial model wasn’t intertwined with our store network. This is what we’re going to improve next time."

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