METRO Cash & Carry
The goal of METRO Cash & Carry is to become the “champion for independent business”. The company wants to become a preferred partner for selected customer groups in the food service, independent retailer and service provider sectors, which results in a significant market share among these customer groups. To achieve this goal, METRO Cash & Carry will have to develop from a transaction-driven supplier primarily focused on product sales into a partner who is systemically important to its customers and thus does not only offer products, but addresses its customers’ needs with holistic solutions.
In order to achieve these goals faster, the sales line has identified two central action areas: establishing the New Operating Model and at the same time strictly implementing the strategic repositioning that has already been initiated.
New Operating Model
This explicit focus on customer and market requirements guarantees METRO Cash & Carry’s future profitable growth and an increase in company value.
METRO Cash & Carry launched the New Operating Model in financial year 2014/15. In the context of the introduction of the new management model, the individual METRO Cash & Carry countries were divided into the three clusters Horeca (focusing on hotels, restaurants and catering firms), traders (focusing on independent resellers such as kiosk operators, bakers and butchers) and multispecialists (focusing on Horeca, traders and service companies and offices). This categorisation was guided by the strategic focus on customer groups and expected market potential. Together with the responsible member of the Management Board, the management of the METRO Cash & Carry segment is responsible for the three clusters. Three operating partners are mandated with the individual clusters and support the countries with overarching measures geared towards specific customer groups. In line with the New Operating Model, strategy and financial planning (Value Creation Plans) starts with the customer and the various market segments with the objective of identifying and exploiting the additional potential for METRO Cash & Carry in the individual countries. To achieve this objective, the company specifically aims to better understand the requirements of selected key customer groups to support the transformation from a transaction-based partner into a systemically important partner. The new model is based on the approach used by private equity companies and the associated concept of active ownership. It represents a further step towards promoting entrepreneurial spirit within the organisation by transferring not just greater responsibility but also greater creative freedom to the national subsidiaries of METRO Cash & Carry while also providing for the international coordination of measures geared towards specific customer groups. The New Operating Model is scheduled to be fully implemented by October 2016.
Implementing the initiated strategic repositioning
Increase customer value: the explicit focus on the customer with the aim of generating added value, which clearly distinguishes the company from others, is an inherent component of METRO Cash & Carry’s mission statement and, through this, is firmly entrenched in its strategy. All measures – including those aimed at the strategic transformation of METRO Cash & Carry – begin from the customer’s perspective and are coupled with the question of the extent to which this can increase customer value, both now and in the future.
This perspective is not limited to product transaction. In order to be able to generate unique added value for the customer, the business model and the customers’ needs must be understood integrally. Based on this, METRO Cash & Carry will offer solutions that can help to shape customer segments in the future, thereby transforming the customer relationship into a strategic partnership.
Transform and grow
METRO Cash & Carry operates in 26 countries in Europe and Asia. The markets in the various countries are at different stages of maturity. As a result, the focal points for the target customer groups differ significantly in the various countries. Because the countries’ stages of development are changing continuously, relevant changes must be anticipated at an early stage and local business models transformed based on the changes in the requirements and customer segments in the respective country. In this process, METRO Cash & Carry also draws on experience from the countries in its current portfolio and in company history.
Growth is a key component of company strategy. The wholesale stores are the most important growth platform. They have already contributed to the growth of METRO Cash & Carry for nine successive quarters with an increase in like-for-like sales. The expansion of the existing business model through the development of the delivery service, predominantly to customers from the food service sector, will remain a crucial growth driver.
Improve and expand
The opening of new wholesale stores, with a focus on Russia, China, India and Turkey, will make a significant contribution to the expansion of METRO Cash & Carry. In addition, the sales line will increasingly grow as a result of company takeovers. The acquisition of the Classic Fine Foods group in financial year 2014/15, a delivery service provider for premium hotels, restaurants and catering firms with a special focus on Asia, is one example of this. In light of changing customer needs and market conditions, METRO Cash & Carry will continue to constantly examine its portfolio to see whether strategic goals with regard to profitable growth, market shares or increased company value can be achieved.
Innovation, both in the core business of wholesale and in delivery as well as in the management of target customer groups, is a fundamental part of this strategy. In this way, METRO Cash & Carry supports its customers by developing innovative and digital solutions, for example, for the food service sector, through such initiatives as the Techstars METRO Accelerator programme.