Metro Group begins second phase of Shape 2012

Metro Group has essentially completed the first phase of its comprehensive efficiency and value-enhancing programme called Shape 2012, which included the restructuring of the cross-divisional functions, the assignment of staff as well as the discussion of the necessary process adjustments. The German retailer will now start with the second and more difficult part of the programme, Lebensmittel Zeitung reported after an interview with Zygmunt Mierdorf, Management Board Member of the Metro Group. It will now work to make the individual business units more efficient. In January this year, the company announced the 'Shape 2012' programme, which aims to ensure profitable growth in the long term, increasing customer focus and will make the company more transparent, less complex and more efficiently managed. Functions like buying and logistics that have previously been conducted in a cross-divisional manner will become the responsibility of the sales divisions. The potential for profit increases through the programme by 2012 and beyond is EUR1.5 billion (USD2.0 billion) of which EUR800 million (USD1.04 billion) will be achieved through cost cutting measures, the rest through productivity improvements. In order to improve banner efficiency it was necessary to change the organisation in some parts which primarily affected cross-divisions such as centralised purchasing.

Metro Group Buying (MGB) is to be dissolved at the end of the year. As of 1 July, the separate banners will be responsible for purchasing. Alongside this, the subsidiary Metro Group Solutions (MGS) will also be dissolved. However, the central logistics company MGL will remain part of its core structure, but it will receive a new supervisory body, appointed by the banner interests which are led by Real head Joël Saveuse. There will be also changes for Metro Group Information Technology (MGI). As of 1 July, there will be a new CIO office at Metro Group, which will be responsible for data security and data quality.

Overall, approximately 3,000 employees are affected by the reorganisation. Around 10% of them will not get a new contract. A total of 15,000 jobs will be cut worldwide as a result of the restructure, largely through "natural fluctuation". This number has been derived from the planned cost reductions of EUR800 million (USD1.04 billion). However, Shape 2012 is primarily a growth and value-enhancing programme and it will be the operational business that will be the main contributor. The next and most difficult step will be to take appropriate measures for efficiency improvements. The most important thing in the process is continuous controlling. Shape 2012 is also a cultural shift towards greater entrepreneurship and with regard to underperformance, the level of tolerance of the management will drop, Mierdorf said.

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