Poor financial performance has caused German retailer Metro to halt its store rollout in Indonesia.

Metro announced last July that it would open its first cash and carry store in Jakarta in 2012, the first of around 20 Metro stores planned in Indonesia. However, the retailer decided to focus on its emerging markets and expand network in other countries, instead, following a net loss of 82 million euros (US$105.89 million) in the first quarter, down from 3 million euros (US$3.9 million) profit a year earlier.

Heavy loses were attributed to its electronics unit Media-Saturn, where it injected a large investment and has failed to attract customers despite aggressive price cutting.

This year, the company decided to cut 200 million euros (US$258.5 million) from its capital expenditures of 1.8 billion euros (US$2.32 billion).

“We still believe Indonesia has enormous potential as one of the fastest emerging markets in the world. However, after carefully observing economic challenges as a whole, we have to prioritise our investments,” said Metro Cash & Carry CEO Frans Muller.

Its Indonesian partner Sintesa Group says it regrets Metro’s decision.  

GB