1. Despite losses, why India is Metro Cash & Carry’s key market

Despite losses, why India is Metro Cash & Carry’s key market

German wholesale retailer Metro Cash & Carry is almost more than a decade old in India now, but continues to post losses.

By: | Published: June 20, 2016 6:27 AM

German wholesale retailer Metro Cash & Carry is almost more than a decade old in India now, but continues to post losses. In FY15, it reported a net loss of `110.72 crore, compared to a loss of `142.14 crore a year ago. Net sales were `3,973.76 crore, compared to `3,439.9 crore a year ago. Arvind Mediratta, managing director, Metro Cash & Carry India, in an interview with Jharna Mazumdar, says despite the losses, the company continues to consider India as one of its most important markets. The firm is focusing on improving its supply chain infrastructure, raising quality standards and helping promote value offerings to reduce its losses. It is on track to open 50 stores by 2020. Excerpts:

Metro Cash & Carry has been one of the early entrants in India, but has not expanded fast. Going forward, what is your expansion and investment plans? Earlier, you had said the company will have 50 outlets by 2020. Is it on track?

We have always maintained that we are driven by our own strategic considerations — whether we are navigating new markets, adapting, localising or fortifying. Our growth has been steady and at our own pace based on internal and environmental factors. Having said that, India is seen as one of the most promising markets for us. Recently, Olaf Koch, the global chief executive officer of the group, announced India’s name alongside Russia, China and Turkey as one of the top markets for the group to focus on. We are very much on track towards operating 50 outlets by 2020. As we go forward, we will continue to evolve towards a more profitable business model every year in the Indian market.

When do you hope to break even and what are the steps you are taking to reduce your losses? What is your turnover target in FY17?

We do not comment on profitability or financial information.

What is the overall demand scenario at the moment and your outlook for FY17?

We maintain a very positive outlook for the coming year. Government policy on cash & carry is largely stable and has seen broad political alignment. The government seems committed to economic and social reforms and to investments in the retail and food industries — from processing to quality and food safety. Infrastructure also seems to be a priority, which can greatly aid the development of our supply chains. So, it’s fair to say that companies like Metro will see steady growth if they meet the challenges of meeting customer needs while keeping price points low, building brand loyalty in new customers and adapting to the dynamic market environment.

Apart from Bengaluru which other states the firm plans to enter? What is the store count right now and how many states is Metro India currently in?

We are present in nine states. Currently, we have 20 outlets in 13 cities across the country. We are proud to announce that we are shortly opening our 21st outlet in Whitefield, Bengaluru, which will also be our 5th in our home city.

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