Accounting & Sustainability Assignment

Accounting & Sustainability Assignment

Introduction

The economic crisis all over the world has affected each sector of the world's economy. The recession has caused business analysts to analyse the financial health of the of the world's largest retail brand Carrefour owned by Metro AG. Metro AG is Germany's largest retail brand that was founded in 1996. The Metro Ag was a collaboration of three companies that included Metro Cash & Carry, Kaufhof Holding and Asko Deutsche Kaufhaufs. The company has 2440 hyper stores, departmental stores, retail shops and warehouses in all parts of the world. The worldwide stores offer different kinds of retail and wholesale grocery, electronics and clothing products of all brands under one roof. The French retail store of Metro AG, Carrefour has faced difficulties in maintain its position in the retail business and has faced severe competition from Aldi and Lidl. It has been a difficult journey for Carrefour up till now to achieve growth along with earning profits for the organisation. As a competition analyst the main features that will be researched includes: first the financial health and performance of Metro AG and Carrefour during the last two years, second it will take into consideration the costing and performance of Carrefour and will activity based costing help in determining whether the a strong financial health can be maintained and sustained by the organisation.

Discussion

Part A

Carrefour has become a homely name for many of the people living in different countries. Metro AG has been able to establish its retail brands all over the world. These retail stores have made the shopping of grocery, electronics, clothes, entertainment products and etc. under one roof and have provided its customers the advantage of one-stop shopping which means everything is available under one roof. In recent times the bulk buying and one time shopping has become popular among the people as it is difficult for the people to visit supermarkets every day or a week to buy the products. The trend of bulk buying has been extended to the developing countries as well where these departmental stores have become a huge success for their people. Carrefour despite providing all the facilities similar to other retail brands in the market still faces difficulty to compete and sustain its position in the retail business. The main competitor of Carrefour includes Wal-Mart, Metro Cash & Carry, Aldi, Lidl and etc.

The financial performance in 2011 shows that due to recession in America, Europe and other parts of the world has affected the business activities of any kind. In 2011 the business activities started returning and people were attracted towards the markets. The sales of the Carrefour increased by a rate of 5.5% and the increase in operating income of 9 to 10% have produced a positive result for a dooming economy. The Carrefour Planets all over the world reported significant success and resulted in an increasing 11.5% contribution in the Group's profits.



Carrefour is reviving after facing sever competitions from Wal-Mart and Tesco, analysts gave their ...