German wholesaler Metro Cash & Carry is looking at opening 7-8 stores in India during the current fiscal with an investment of around Rs70 crore each.
“We are looking at a 40-city presence,” Rajeev Bakshi, managing director, Metro Cash and Carry India, said, without giving a timeframe.
Speaking at the opening of the wholesaler’s first store in Delhi and tenth till date, Bakshi said exorbitant real estate prices had kept Metro away from Delhi, adding the company plans to set up two stores in western Delhi and one each in northern and southern parts.
While it is planning to open its next store in Jaipur in April, it is also looking to consolidate its position in the South by making an entry in Chennai.
On the impact FDI in multi-brand retail may have on a cash and carry chain like Metro, Bakshi said, “Large-format hypermarkets are an indirect competition to us.”
Metro wants to stick to cash and carry, and does not want to get into multi-brand retail even when FDI is allowed in the sector.
Majority of the products are sourced locally and the assortment is based largely on local demands, Bakshi said. “As long as the FMCG growth story continues, we will continue to grow,” he said. The German retailer is also increasingly looking at storing private labels and local brands. Food, mainly include pulses, spices, condiments and cereals are its biggest-selling stock-keeping units (SKUs). The total number of SKUs it stocks is 10,000.
“While currently the cash and carry segment is growing at 8%, in the next three years it is slated to grow at around 12%”, Purnendu Kumar, senior vice-president, retail, Technopak, a consultancy firm, said, adding, the major challenges faced by the segment include fragmented supply chains. “It takes a cash and carry chain around 3 to 4 years to break even, but in India the segment is on a growth mode,” he said.
Among all the verticals it caters to, small traders form Metro’s largest client base. The others include hotels, restaurants and caterers, corporates and other institutions. It product range include groceries, FMCG, consumer durables, apparels, exotics, household appliances, furnishings amongst other things. The German wholesaler has so far spent around euro 150 million, or Rs900 crore, on the Indian venture.
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