German retailer Metro is to scrap its consumer electronics venture in China, once trumpeted as an engine of future growth, after meeting unexpectedly strong competition.

It is the latest setback for an international retailer in the world’s most populous country, where groups like Best Buy, Kingfisher and Home Depot have struggled after underestimating local and online rivals.

Metro, which also reported a smaller-than-expected 0.5 per cent rise in fourth-quarter sales, said yesterday it would make an undisclosed provision for the withdrawal of Media-Saturn, Europe’s largest electricals stores chain, from China.

Metro, which has 2,200 stores in 32 countries had hoped to set up over 100 Media-Saturn stores in China, but it now seems the seven it operates in and around Shanghai will be closed.