METRO Cash & Carry
METRO Cash & Carry is a leading international player in self-service wholesale trade. METRO GROUP’s largest sales line, which celebrates its 50th birthday in 2014, also lent the company its name: In 1964, founder Otto Beisheim, who passed away in February 2013, opened the first METRO Cash & Carry wholesale store in Mülheim an der Ruhr. 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. Over the decades, METRO Cash & Carry has continually expanded its business model, adding to its range of products new items and services geared to customer needs and local requirements. Today, our sales line has established itself among the top players in its international industry.
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, around 120,000 employees across the world work to make their customers successful. Hotel and restaurant owners, catering firms, independent retailers, service providers and public authorities particularly 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 specific solutions such 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. Our sales line views itself as an equal partner with its customers. As such, it is not just a vendor. Rather, it has deep understanding of the business and the specific challenges faced by professional customers and helps increase their competitiveness. In this way, the wholesaler METRO Cash & Carry ensures the long-term success of its customers. After all, this is the only way the company can produce sustainable growth in sales and earnings.
In the short financial year, METRO Cash & Carry continued to align its internal structures with its stronger focus on the customer. Since summer 2013, the country managing directors have had direct responsibility for the departments that play a key role in customer and supplier partnerships. These include marketing, customer management, target group management and pricing. All related processes will be placed under review so they can be systematically and measurably improved. In all METRO Cash & Carry countries, local specialists work with experts from company headquarters to tailor the range of products even more to customers’ needs, improve the availability of goods, refine assortment design for individual customer groups, devise a more competitive price policy and develop services for a more comfortable shopping experience.
Tailored assortments and services
A broad product range, quality, freshness and tailored services are the compelling benefits METRO Cash & Carry offers commercial customers in 29 countries around the world. The sales line offers independent entrepreneurs a targeted range of food items, selected non-food products and tailored solutions. It markets brand products from renowned producers as well as own-brand products that couple high quality with attractive prices. The product assortment comprises about 50,000 items. METRO Cash & Carry emphasises local products: up to 90 per cent of its assortment is purchased from local producers and providers. In 2013, our sales line expanded its assortment of local products. Based on surveys of customers in Germany, METRO Cash & Carry identified around 300 new products and added these to the product mix of its wholesale stores in July 2013. By the end of September, this figure was already 550. The assortments and food products of other European countries served as a model for these additions. Products sourced directly from these countries, such as Italian antipasti, Spanish sausage and French tartlets, can be found alongside German products.
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 22,000 square metres. Most of the stores have a selling space of between 6,500 to 8,500 square metres.
In initially selected countries, METRO Cash & Carry has already begun to refine its business model: the new business model is geared more towards local customer needs and competitive environments. It draws on regional customer and employee surveys as well as on analyses of local markets. The unique feature of this work is that customers and employees are closely involved in the change process from the very beginning and remain involved in it by serving on joint customer and employee committees. In Spain and Italy, twelve wholesale stores have already been successfully restructured on the basis of this business model: in particular, changes impacted store layout, assortment design and product displays. In Germany, three stores were redesigned and reopened during the short financial year.
Focused on the customer: innovative sales formats
In addition, METRO Cash & Carry is increasingly adding new sales formats to account for different customer groups’ expectations and needs. Our sales line has developed a special store format especially for city centre locations in France. These city centre stores have been successfully introduced in Italy as well. With a selling space of up to 3,000 square metres, these stores address the needs of the key target group of hotels, restaurants and catering firms, and primarily offer fresh foods. Thanks to city centre locations, METRO Cash & Carry can shorten trips made by suppliers and customers. This enables fast and comfortable shopping – and makes it easier for customers to quickly meet urgent needs in a cost-effective manner.
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. By expanding its business model, METRO Cash & Carry aims to attract new customers, with a particular focus on hotel and restaurant owners as well as catering firms. This option, which was introduced in 2009, 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. With its delivery service, the sales line generated sales of about €2.0 billion during the period under review – a 19.6 per cent increase over the comparable period in 2012.
The delivery service also aims to create added value for customers: the simple ordering process enables customers to save time shopping. Professional customers can order goods in the same high quality they have come to expect at a fair price. In some countries, our sales line also offers the option of ordering goods online. 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. Additional services such as individual order forms and pre-commissioning with in-store pick-up round off the sales line’s service range. In addition, online shops complement stationary stores in countries such as China, Poland, the Netherlands, Romania and Hungary.
Close to the customer: sales force
Customer service is also provided by the sales line’s sales force, which works with customers on site and serves as the first point of contact for customer requests. The aim is to optimise consulting and service options for customers, to better leverage the existing potential for expanding customer business through personal contact, and to generate greater sales. The specially trained sales force employees have a unique range of products they can actively offer to their customers. Furthermore, METRO Cash & Carry in Germany has defined new core assortments for selected customer groups, including restaurant owners, bakers and butchers.
Rigorous service focus
The support of independent traders – especially in emerging markets – is a key business area for METRO Cash & Carry. For this customer group, our sales line has developed specially tailored 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’ businesses. Together with the customer, METRO Cash & Carry analyses and assesses, for example, specific store parameters and operations. Drawing 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 independent retailers.
Our sales line has developed a franchise concept for small independent traders and kiosks in countries such as 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 adhere to agreed standards: this ensures brand value. In Poland, about 2,000 small traders have signed up for the concept that operates under the name ODIDO – nearly 400 more than at the end of 2012. In Romania, approximately 600 METRO Cash & Carry customers operate under the name LaDoiPaşi. Our sales line also helps professional customers to launch 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 six core own brands 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 to 17.0 per cent during the reporting period. This amounts to sales of €3.8 billion.
In particular, the own brand Rioba, which features special product solutions for cafés and bars, represents a success story. The product range includes professional espresso machines and a complete tableware assortment as well as various coffee varieties and baked goods. There are now a number of Rioba cafés that have been founded as part of a partnership between METRO Cash & Carry and coffee shops. Launched as complete solutions, the coffee shops exclusively use and sell own-brand products.
International presence expanded
METRO Cash & Carry has the largest global footprint of all METRO GROUP sales lines. It operates in 29 countries on three 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 – this must be taken into account in the sales line’s daily work.
METRO Cash & Carry continued its expansion effort in 2013. A total of ten wholesale stores were newly opened. The international share of sales rose from 84.5 per cent to 84.7 per cent. In line with our strategy, we first concentrated on improving like-for-like sales in existing markets and accelerating expansion in selected countries where we already do business. The focal areas of expansion are the growth regions of Eastern Europe and Asia, particularly China and Russia.