May 05 2014 Metro to add 50 wholesale stores by 2020 in India Suneera Tandon

Read more at: http://www.livemint.com/Industry/fANSdu1siUkORBTLMqyV3N/Metro-to-add-50-wholesale-stores-by-2020-in-India.html?utm_source=copy Metro to add 50 wholesale stores by 2020 in India Metro operates 2,200 stores in different formats such as hypermarkets, wholesale, electronics and departmental stores in 32 countries. Photo: Bloomberg New Delhi: Metro AG will open 50 wholesale stores in India by 2020, making the country one of its top growth targets, the German retailer said on Monday. The company, which runs 16 distribution centres in 12 cities across India, said India will join Russia, China and Turkey as one of four focus expansion countries for Metro. India has always been an important future growth market of Metro and we have seen continuous like-for-like growth recently in India, said Olaf Koch, chief executive at Metro Cash & Carry, which opened its India operations in 2003. The expansion is likely to provide, a firm foundation for us to switch our expansion into the fast lane now, said Rajeev Bakshi, managing director of Metro Cash & Carry India. Metros announcement comes after Wal-Mart Stores Inc., the worlds largest retailer, in April this year date said it will add 50 wholesale outlets over the next five years in India, where supermarket retail is closed to foreign direct investment (FDI). India allows 100% FDI in wholesale trading. These are typically large stores that allow bulk purchases at discounts for small traders. Indias is a hugely unorganized wholesale market, especially across certain consumer categories, and cash and carry business has immense potential, said Vikash Agarwalla, principal at consulting firm Booz & Co India. However, its a business of scale, and companies need to add volume in terms of numbers of stores to get traction as margins are lower, he said. The German chain operates 2,200 stores in different formats such as hypermarkets, wholesale, electronics and departmental stores in 32 countries. In 2012-13, the company sold about 66 billion worth of goods. In India, it will look at cities with a population of 1 million and above. In the past, Metro has invested an average of 10-15 million per store in India. In the past year, Reliance Industries Ltd (RIL) has started focusing on the wholesale business, ramping up the format from one store in Ahmedabad to over 15 in 15 cities. French Carrefour SA too has opted for wholesale operations in India due to restrictions in opening supermarkets. Organised retail accounts for only 7-8% of the overall retail sector in India. With approximately 50 shops, organised wholesale is a small part of it.

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