German Department Store Hit By Spending Low

Europe's largest department store and mail order group, KarstadtQuelle has been badly hit by poor consumer spending. German business daily Handelsblatt reported that the Essen-based department store chain was planning to slash 3,000 jobs and cut salaries as a result. On Thursday, KarstadtQuelle announced that the second half of 2003 had yielded disappointing results after a relatively stable spell in the first half. "The crucial thing was the insecurity of consumers amid continuing reform discussions as well as the aggressive competition in Christmas sales," a spokesman said. KarstadtQuelle posted a net profit of €108 million last year, €30 million less than what analysts had expected. The company registered a profit of €162 million in 2002.