METRO Cash & Carry
METRO Cash & Carry – the name does not just stand for a leading international player in self-service wholesale. It also stands for the largest sales line of METRO GROUP. At the same time, it is the cradle of the Company: the first METRO Cash & Carry wholesale store was opened in 1964 in Mülheim an der Ruhr, Germany, by METRO AG founder Otto Beisheim, who died in February 2013. Its concept was revolutionary at the time: professional customers could select their own purchases all under one roof, pay for them in cash and take the items with them. Today, METRO Cash & Carry has established itself among the top players in its international industry: in 2012, sales totalled approximately €32 billion with an EBIT before special items of €947 million. As a result, the sales line produces around 50 percent of METRO GROUP sales and EBIT.
Our sales line operates under the brand names METRO and MAKRO in 29 countries in Europe, Asia and Africa. In Germany, the portfolio is complemented by the C+C Schaper brand. Every day, more than 100,000 employees around the world work to make their customers successful. Hotel and restaurant owners, catering firms, independent retailers, service providers and public authorities, in particular, value the comprehensive range of products offered by METRO Cash & Carry. For each of these customer groups, our sales line offers customised assortments and services at an excellent value for money. This offer is complemented by such innovative solutions as retail concepts and professional consulting services to optimally support professional customers in their respective businesses and make these more successful.
The customer is the central focus of all products and services provided by METRO Cash & Carry. The aim is to markedly improve the satisfaction of and added value for all groups. This is the only way the Company can produce sustainable growth in sales and earnings. The new strategic focus initiated by METRO Cash & Carry is entirely centred on the customer. The focus is on the actual retail business and the relationship with customers and suppliers. All related processes are currently under review and are being measurably improved. The goal: METRO Cash & Carry will be able to more quickly identify the needs of professional customers in order to offer them specific products geared to their needs – so their businesses can make a profit. In all METRO Cash & Carry countries, local specialists work with experts from Company headquarters to improve the range of products and their availability, refine assortment design, devise a more competitive price policy and develop services for more comfortable shopping.
Focused on the customer: tailor-made sales formats
A broad product range, quality, freshness and tailor-made services are the compelling advantages METRO Cash & Carry offers commercial customers in 29 countries around the world. The assortment comprises 20,000 food and 30,000 nonfood items. The cash & carry company markets brand products of renowned producers as well as own-brand products that couple high quality with attractive prices. METRO Cash & Carry emphasises local products: up to 90 percent of its assortment is purchased from local producers and providers. Another strength is METRO Cash & Carry’s flexible sales concept, which can be optimally adapted to meet the specific conditions and needs of the respective countries. METRO Cash & Carry varies its formats, particularly with respect to assortment depth and selling space, which can cover from 2,500 to 16,000 square metres. Most of the stores have a selling space of between 6,500 and 8,500 square metres – the ideal size for customer needs in Eastern Europe and Asia. By contrast, larger store formats are also widespread in Western Europe.
In addition, METRO Cash & Carry is increasingly adding new sales formats to account for different customer groups’ expectations and needs. The wholesaler’s MAKRO Punkt format, for example, is especially geared towards independent regional retailers in Poland. On a selling space of about 1,500 square metres, the store primarily offers beverages and tinned foods as well as dairy products and core assortments in the areas of fruit and vegetables – exactly those products that a kiosk or small grocery store needs to run a successful business. At the end of 2012, METRO Cash & Carry operated 11 MAKRO Punkt stores in Poland; about 2,000 food products are always on sale in the stores. To complement their own offer, the stores may also utilise the storage space and assortment of the nearest METRO Cash & Carry wholesale store. Using different brand names, METRO Cash & Carry is now rolling out the concept in 6 additional countries: Bulgaria, Croatia, Romania, Russia, Serbia and Ukraine.
METRO Cash & Carry has developed a special format for city centre locations that has already been introduced successfully in France and was introduced in Italy in 2012. These stores with a selling space of up to 3,000 square metres address the needs of hotels, restaurants, and catering firms, in particular, and primarily offer fresh foods. Thanks to central downtown locations, METRO Cash & Carry can shorten trips made by suppliers and customers. This provides for fast and comfortable shopping – and makes it easier for customers to quickly meet urgent needs in a cost-effective manner. METRO Cash & Carry opened the first stores with this format in 2010 and 2011 in Paris. It added 1 in Rome in 2012: La Casa dell’Horeca. This new store also boasts environmentally friendly technologies: energy-saving freezers, LED lamps and the best possible use of daylight help to keep energy consumption low. In addition, the store is outfitted with solar panels so that hot water and electricity can be generated on site.
With its new formats, METRO Cash & Carry can tap business opportunities outside metropolitan areas and in areas where the operation of a larger store would not be profitable. In this way, our sales line continues to strengthen its leading role in the self-service wholesale segment.
Expanded business model: delivery
Delivering goods to customers contradicted the original cash & carry concept for many years. The delivery service is now considered one of the most important successes in the sales concept’s transformation. This option has become an integral part of the services offered in all countries where METRO Cash & Carry does business. Around the world, several thousand employees work to process customer orders, package products and then deliver them. By expanding its business model, METRO Cash & Carry aims to win new customers, with a particular focus on hotel and restaurant owners as well as catering firms. At the same time, the sales line thus improves the service it provides to its current top customers. During the financial year 2012, the sales line generated sales of about €2.2 billion – a 33 percent increase over 2011 – with this service.
Thanks to this delivery service, METRO Cash & Carry is creating added value for customers in the form of time savings that are worth their weight in money. Professional customers can quickly place their individual orders by e-mail, by fax or by telephone. In selected countries, our sales line also offers the option of ordering goods from an online catalogue on an experimental basis. Customers typically receive their orders within 24 hours. At the same time, the delivery service guarantees that customers consistently receive high-quality, safe products. By delivering the products, METRO Cash & Carry ensures that the logistics cold chain remains intact and that all principles of the internationally recognised quality assurance concept HACCP (Hazards Analysis and Critical Control Points) are applied at all times. Such additional services as individual order forms and pre-commissioning round out the sales line’s service range.
To further improve its service for customers, METRO Cash & Carry offers customers in a number of countries such as China the opportunity to order office supplies directly over the Internet and have the requested articles delivered.
Rigorous service focus
Independent traders – especially in emerging markets – are important to METRO Cash & Carry. For this customer group, our sales line has developed specially tailored trader support programmes. The key aim of these programmes is to bolster the competitiveness of small retailers, protect their independence and establish long-term business relationships with these customers. The programmes comprise country-specific measures that help to professionalise and modernise commercial customers’ business. Together with the customer, for example, METRO Cash & Carry analyses and assesses specific store parameters and operations. Based on the collected data, the sales line’s employees develop specific improvement measures, for example with a view to assortments, prices, store layout and marketing. In Russia and India, METRO Cash & Carry organises seminars to impart specific trade knowledge to retailers.
Our sales line is testing a franchise concept for small independent traders and kiosks in Bulgaria, Poland, Romania and Serbia. Here, METRO Cash & Carry acts as a kind of franchisor with an individual advertising campaign and offers the companies training, advice on assortments, marketing packages and professional price comparisons. The store owners manage their stores completely independently, but use uniform logos and the joint advertising campaign for their own purposes. METRO Cash & Carry provides the necessary expertise, offers professional support and delivers the products. In turn, retailers agree, among other things, to include a minimum number of own-brand articles and products in their assortments. In addition, the assortment of the small food stores is designed to ensure that consumers find everything to satisfy their daily needs – including fresh fruit and vegetables. All store owners use a uniform logo in their stores and adhere to agreed-upon standards: this ensures brand value. In Poland, about 1,500 small traders have signed up for the concept that operates under the name ODIDO – twice as many as in the previous year. In Romania, 500 METRO Cash & Carry customers operate under the name LaDoiPaşi. Our sales line also helps professional customers to start up businesses.
Strong own brands for professional customers
Since 2009, METRO Cash & Carry has been forging ahead with its own-brand strategy through a focused product portfolio: the 6 core own brands of Aro, H-Line, Horeca Select, Fine Food, Rioba and Sigma offer excellent value for money and thus real added value, particularly for professional customers. The own-brand share of METRO Cash & Carry’s total sales rose by 1 percentage point to 16.7 percent in the financial year 2012 compared with the previous year.
METRO Cash & Carry is more international than any other METRO GROUP sales line. It operates in 29 countries on 3 continents and faces different parameters in each individual market. While trade structures in the Western European markets are already fully developed, markets in Eastern Europe, Asia and Africa are in different development phases.
To more quickly address regional economic challenges and better exploit market opportunities, our METRO Cash & Carry sales line realigned its management structures in April 2012: business in the 8 core countries of China, Germany, France, Italy, Poland, Russia, Spain and Turkey is now the direct responsibility of the CEO. These countries generate approximately two-thirds of METRO Cash & Carry sales. Activities in the other countries where METRO Cash & Carry does business are overseen by 3 regional management teams. The new structure of the sales line allows for greater market and customer centricity and will facilitate fast implementation of growth programmes.
METRO Cash & Carry continued its expansion effort in the financial year 2012. A total of 46 wholesale stores were newly opened. The international share of sales rose from 83,5 percent to 84,3 percent. The Company will not continue to pursue the planned market entry of METRO Cash & Carry in Indonesia. We have taken the strategic decision to first concentrate on improving like-for-like sales in existing markets and accelerating expansion in selected countries. In the financial year, we also sold the wholesale business of MAKRO Cash & Carry in the United Kingdom to Booker Group PLC.
The focal areas of expansion are the growth regions of Eastern Europe and Asia, particularly China, Russia and Turkey.