METRO Cash & Carry
The goal of METRO Cash & Carry is to be the “champion for independent business”. The company wants to be a preferred partner for customers in the food service, independent retailer and service provider sectors and achieve a significant market share among these customer groups. To achieve this goal, METRO Cash & Carry continues to forge ahead with its transformation from a transaction-driven partner into a partner who is systematically important to its customers and can address all of their needs with holistic solutions. In the process, the sales line has a strategic focus on the central action areas that have already been identified: establishing the New Operating Model and strictly implementing its strategic repositioning.
New Operating Model
As part of its explicit focus on customer and market requirements, METRO Cash & Carry introduced the New Operating Model in financial year 2014/15. The aim is to transfer greater operational responsibility and creative freedom to the national subsidiaries to be able to respond faster and more flexibly to local demand and specific customer requirements, and thus increase the sales line’s growth potential. As part of the introduction of the New Operating Model, the METRO Cash & Carry countries were classified into 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 country organisations with overarching measures geared towards specific customer groups. In connection with the New Operating Model, a new approach to strategy and financial planning in the form of Value Creation Plans was introduced. By the end of financial year 2015/16, all METRO Cash & Carry countries had developed plans geared towards their respective markets and customers and began to implement these.
The new model draws on the concept of active ownership. It strengthens entrepreneurial thinking and action at the national subsidiaries and thus represents another move to foster an entrepreneurial spirit across the organisation. The topics of brand, quality, human resources, finance and legal and compliance will continue to be managed centrally.
Aside from the customer-specific country clusters, focus topics of relevance to the entire company such as food service distribution, supply chain and procurement will also be bundled. These topics will be overseen by operating partners with responsibility for one topic each. In addition, the sales line will continue to pursue a company-wide exchange of specialis expertise through so-called federations. These are international working groups that pursue with sole responsibility overarching topics such as delivery service, foster an exchange of best practices and realise potential economies of scale.
Implementing the initiated strategic repositioning
The explicit focus on the customer with the aim of generating added value is an inherent component of METRO Cash & Carry’s mission statement and is firmly entrenched in its strategy. All measures – including those aimed at the company’s strategic transformation – begin from the customer’s perspective and are coupled with the question of the extent to which this can generate customer value. A holistic understanding of customer needs and business models is a key requirement here. In this way, METRO Cash & Carry manages to offer not just products, but solutions, thereby transforming customer relationships into long-term partnerships.
Improve and transform
METRO Cash & Carry operates in 25 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 adapted accordingly. The Value Creation Plans ensure that this is the case. For example, the business model in Belgium and the Netherlands was optimised by reducing store space. 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.
Grow and expand
Growth is a key component of the company strategy. The wholesale stores play an important role in this. It is thanks to their contribution that METRO Cash & Carry has registered an increase in like-for-like sales for 13 successive quarters. In addition, the sales line has strengthened its presence by opening a total of 17 additional wholesale stores in the expansion countries of Russia, India, China and Turkey.
The sales line also forged ahead with the expansion of its delivery business. For example, three new delivery depots were opened in Germany and one in China to cater to customer needs. Delivery sales increased by 18 per cent in financial year 2015/16 and now amount to about 13 per cent of METRO Cash & Carry’s sales. This positive development has also been driven by the takeover and successful integration of the Classic Fine Foods group as well as the acquisition of Germany’s leading food delivery service Rungis Express in February 2016. With the agreement to acquire French food supplier Pro à Pro, which was signed in July 2016, METRO Cash & Carry has also prepared the ground for an expanded service offering for customers in the French market. The transaction has yet to be closed.
Innovation, both in the core business of wholesale and in delivery as well as in the management of target customer groups, is another fundamental part of METRO Cash & Carry’s strategy. For the company, this translates above all into a requirement to identify relevant market trends early on, to recognise changing customer needs and to derive specific solutions. METRO Cash & Carry supports the development of innovative, digital solutions for the food service sector through such initiatives as the METRO Accelerator powered by Techstars. The company uses this programme, which it realises in cooperation with the US company Techstars, to gain access to value-adding, innovative solutions which it can then pass on to its customers in the food service and hospitality sector. The participating start-ups, in turn, benefit from the immense combined network of the two partners. Following the successful first round of the Accelerator during financial year 2014/15 with eleven selected start-ups, the second round with ten international start-ups started in autumn 2016.