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German wholesaler Metro has called for bidders for its operations, kicking off the official sale process.
German wholesaler Metro Group will be focusing on online sales for corporate customers and building a fresh food supply chain in Myanmar.
The wholesaler has partnered with Yoma Strategic Holdings Ltd, a Singapore-listed company to launch the service. Myanmar is the 36th country in the group’s network. 75% of the products will be locally sourced through partnership with farmers and food suppliers. The group employs about 150 people and will help to train and improve the skills of suppliers.
The group has built a 5,800 sq m warehouse in Thilawa Special Economic Zone outside Yangon. It distributes more than 2,000 food and non-food products, with plans to increase this to 2,400 by June. About 300 customers had already accessed the website and placed orders before its official launch last Friday.
Philippe Palazzi, COO of Metro, said, “the food wholesale industry in Myanmar offers big potentials for Metro and we believe our engagement in the trade sector will contribute to the local economic growth including the agriculture, tourism and hospitality sectors, and help upgrade the food wholesale infrastructure sustainably for the local community”.
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Metro Cash and Carry India is turning to smaller better stores, one of the five key trends we outlined earlier this year in IGD's Asia Outlook.
Metro Cash and Carry is due to open its 27th store in India. It will operate approx. 3,716 sq m / 40,000 sq ft retail space, around half the size of most of Metro's existing stores in the country. The new compact store in Ghaziabad will be a similar size to the one in Nasik. As the wholesaler continues to accelerate network expansion, it is scaling-down the size of its stores with an eye on profitability.
Arvind Mediratta, CEO and MD of Metro Cash and Carry India, said, "We are doing away with bigger stores in the range of 75,000 - 100,000 sq ft [...] a lot of people think more space means more sales. Customers don’t come to you more often because you have a bigger store.”
Metro Cash and Carry India targets 50 stores by 2020, and with its plans to open smaller stores, the availability and price of development sites could make this number more achievable. As it continues to scale up the business across the country, it will need to be carefully map out suitable and relevant locations for its stores.
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Metro Cash and Carry supporting efforts to digitise traditional kiranas.
Metro Cash and Carry is launching several initiatives that target the neighbourhood mom and pop channel. Arvind Mediratta, CEO of Metro Cash and Carry India, said that it intends to be “champion of all small independent business and be a one-stop solution for them and help them in their business growth”
The retailer opened its first Kirana Success Centre within its flagship store in Bengaluru last month. With the aim to provide kiranas with technical assistance and solutions, the centre will improve in-store visibility and install modern display solutions for these stores.
In addition, the centre will also provide modern point-of-sales counters and educate shopkeepers about inventory management techniques. GST-compliant receipts and invoices can be easily generated to help stores monitor sales revenues.
The initial program was rolled out six months ago to 100 traditional stores and these stores have already reported a 40 per cent increase in sales.
Metro Cash and Carry has also partnered with several suppliers to provide exclusive products tailored for the traditional channel. These exclusive products are offered to the stores at preferred prices, improving margins for storekeepers. The retailer intends to expand these exclusive “kirana-only” products to other suppliers over the coming months.
Another initiative announced recently is the year-end launch of its online platform. Kirana stores will have the option to integrate its supply chain with Metro Cash and Carry. This frees up the storekeeper’s time as Metro will remotely manage the kirana’s inventory and replenish stock when it is running low.
The retailer has also introduced a membership program specifically for the kiranas. For an annual fee of Rs$999 (US$13.50), members would have access to additional discounts and other benefits.
For Metro Cash and Carry, this focus on the kiranas has been rewarding too. They have “been able to garner a 70 per cent market share in the B2B segment and are growing by 15 per cent year on year.”
Metro Cash and Carry is the Indian unit of the Metro Group, a German-based wholesale business. It currently operates 27 wholesale centres across India and has disclosed its intention to open more wholesale centres in areas where there is a higher concentration of kirana stores.
Find out more about the Metro Group here.
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Metro AG in India has partnered with five firms to supply exclusive brands directly to kirana stores, which are small neighbourhood grocery stores.
India is one of Metro's 'focus expansion countries' and it saw strong growth in 2017. With an estimated 10-12 million kirana stores across India, they offer a large business opportunity and Metro currently sells products to nearly 2.5 million of them. It has also been providing door step delivery for harder to reach stores. Metro is the largest cash-and-carry operator in the country and has been looking to increase its reach. However it has been difficult to set up efficient distribution, especially to smaller, more rural areas. This latest partnership follows on from an announcement in May, where it said it would be looking to expand further through acquisitions in business to business space, one segment of which comprises the small grocery stores and kiranas.
The wide distributional reach and continued sales growth of Metro in India provides an attractive proposition for suppliers to work with them to supply exclusive brands. The new alliances will include SC Johnson's All out spray, Mondelez's Halls and Perk brands and Vadilal's frozen ready meal range. Another benefit for suppliers is the data analytics that Metro can provide, creating opportunities for customised, targeted programmes, a capability which is not available through traditional wholesalers.
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