July 31, 2012

Metro Group loves consultants

Metro Group head office (photo: Ludwig Heimrath)
Metro head office in Dusseldorf: A gentleman's club for the consultancy industry
Troubled Metro Group can't seem to get enough of them. According to trade union sources, Germany's largest retailer by annual sales has paid €260m in consultancy fees to McKinsey, Roland Berger, Bain, and Alix Partners etc. over the past years.

Works councils and trade union Verdi are peeved. The McKinsey-driven restructuring programme Shape 2012 hardly seems to have kick-started the floundering giant: the jobs went, but the growth didn't come. Verdi computes that 19,000 jobs have gone world-wide over the last years.

Meanwhile, Metro's latest consultancy-inspired project, "Foundation", aims to reduce personnel and material costs by a further €100m per annum.

The company denies these assertions.

Cherchez McKinsey

Head office in Düsseldorf claims that the unions do not mention the many thousands of new jobs created during the restructure. Metro also emphasises that around two-thirds of all cost-cutting relate to administrative expenses.

A spokesperson also stresses that the company relies on natural wastage wherever possible. The company is not so forthcoming regarding consultancy fees: "The figures given for pure strategic consultancy are much too high."

Reference is also made to stricter controls of external consultancy fees since the beginning of this year.

The group's major shareholder, Haniel, has also employed consultants regarding its €3bn stake in Metro and the huge resultant book losses. Irony of ironies: Haniel's departing boss Jürgen Kluge was a former top consultant for McKinsey. Quot homines tot sententiae...

 
Related article in German: Lebensmittel Zeitung, no. 30, 27.07.2012, by Christiane Ronke


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Comments for this article are closed.

  1. Antony Lumley
    Created 3 August, 2012 14:10 | Permanent link

    This is a typical fairy tale thought up by a weak trade union which has failed in securing the jobs it was supposed to help protect. A company investing in consultants is clearly trying to adapt and move forward. I feel it is time for the unions to modernise and work together with these large companies instead of always acting as a ball and chain intent on slowing progress and causing people to loss their jobs.

  2. Dawson
    Created 18 August, 2012 09:50 | Permanent link

    Proverbs, 15, xxii: "Without counsel purposes are disappointed: but in the multitude of counsellors they are established."

  3. Anonymous
    Created 16 April, 2014 06:38 | Permanent link

    Mike, If you do some research into McKinsey's work for Metro in China, you will find the material for a very interesting story. Look at Media Markt's China strategy development and execution.

    You will also find out why McKinsey answered these comments by saying that they did not pay that much for "pure strategic consultancy". They actually paid much more, but they paid for help in implementation in addition to "pure strategic consultancy".

    How much they paid is not that interesting. It is the terrible ROI that is "interesting". Let's just say that McKinsey will have a hard time bragging about what great work they did for Media Markt in China.

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