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Metro Cash & Carry, the German wholesale giant, is shifting focus from large stores to smaller formats for the Indian market.
The company which commenced business 10 years ago through large formats of 1.25 lakh sq ft stores in the country has now decided to limit itself to around 50,000 sq ft stores.
Currently, it has 15 stores in 12 cities spread across eight states. It is gearing up to open its 16th store in Bangalore in Electronics City, the main IT hub in the city.
“The need to shrink the store size is due to change in business focus. From a general wholesale operator, we have evolved into a multi-specialist wholesaler,” said a company spokesman.
Earlier, it catered to numerous businesses. “Now we have identified hotels, offices and small kirana stores as core to our business,” he said.
Star hotels come procure standardised quality offerings, right from meat, wet-dry vegetables, and crockery needs. Offices procure stationery and cleaning products in large quantity, while small kiranas (with Rs 2-6 lakh turnover a month) find value in buying large and small sachet products from the company.
In large formats, the company was stocking and selling 18,000 to 20,000 SKUs (stock keeping unit). “Now in the small format, we plan to stock 8,000 to 10,000 SKUs mainly catering to local needs,” he said.
The company will focus on open grocery, stationery, small appliances and gifting items and has plans to limit or take off from shelves items such as textiles, footwear and luggage.
The company has realised logistics play a vital role in store profitability and is initiating a cluster based approach to open new stores.
The spokesman said, “We realised this works well when we opened four stores in Punjab – Amritsar, Ludhiana, Jalandhar and Chandigarh in the radius of 100 to 150 km.”
Metro Cash & Carry, in one decade of operating in India, has found real estate ‘right size at right place at right cost’ a major issue, followed by getting talent or manpower – ‘retail with wholesale mindset’.
“For future expansion of stores and business growth, the company is focusing on standardisation of back-end operations,” he said.
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