Metro falls to loss amid Europe austerity Metro announced a lossmaking start to the year and said it was cutting back on its capital spending, highlighting the challenges facing some of the world's largest retail groups amid the tough economic climate. The German retail group, the world's fourth-largest by sales behind Walmart, Carrefour and Tesco, stuck to forecasts of higher revenues this year after sales rose 2.2 per cent to €15.6bn in the three months to the end of March. Metro also maintained its view that full-year underlying earnings would be roughly at last year's level of €2.37bn. The net loss for the quarter of €81m, which compared with a net profit of €14m in the same period last year, marked a difficult start for Olaf Koch, who was promoted from finance chief to chief executive at the start of the year. Metro reported a loss of €9m before interest and tax, compared with earnings of €142m a year ago, and said results had been hit by keener pricing and higher expansion costs. "We have invested massively [in] better prices and additional customer services," said Mr Koch. We now have to work on creating efficient and cost-oriented organisations. The comments highlight how Metro has yet to feel the full benefits of a productivity improvement programme touted by Eckhard Cordes, Mr Koch's predecessor. Mr Koch hinted at a cost-cutting shake-up of the company's head office in Düsseldorf. Metro said it would trim its capital expenditure for the year by 10 per cent to €1.8bn. Mr Koch abandoned plans to expand into Indonesia, saying the group would concentrate on growth in existing markets. Metro's toughest area for sales was western Europe outside Germany, where austerity measures and high unemployment are hitting demand. Sales in the region fell 1.2 per cent, also affected by Metro's sale of electronics stores in France. Sales at Metro's biggest unit, its cash and carry warehouses, rose 3.7 per cent to €7.3bn.