METRO ahead in store race

With new outlet in Bengaluru, it would be one ahead of rival Walmart's 21

METRO Cash & Carry, which claims to be India’s largest wholesaler, will overtake rival Walmart India’s cash-and-carry business, Best Price Modern Wholesale, after opening its 22nd store in Bengaluru’s Mysuru Road this Thursday, it’s sixth in India’s Silicon Valley.

Till now, both the companies were at the same level, having opened 21 stores each. By 2020, METRO plans to set up 50 stores, whereas Walmart plans to have 70. While both are bullish on India, French retailing group Carrefour, which had a cash-and-carry business, left India after it found difficult to do business here.

METRO claims higher revenues and better operational metrics than Walmart’s cash-and-carry business in India though these claims could not be independently verified. METRO is also working on a pilot in Jaipur to offer delivery to its registered customers, and plans to roll out the same across its stores, but it will charge for delivery, depending on the weight and the value of the goods ordered, said Arvind Mediratta, managing director & chief executive officer, METRO Cash & Carry India.

Last year, Walmart India had kicked off online sales from all its stores. METRO has no plans to offer online sales, said Mediratta. Cash-and-carry stores are allowed to sell to business customers like traders and resellers, hotels, restaurants, caterers, companies and self-employed people. Mediratta joined METRO in February this year, after working for nine years in Walmart — he headed Walmart’s cash-and-carry business in India before moving to the US to work for Walmart’s retail business. His brief is to accelerate METRO’s growth in India and make its operations profitable.

Metro has been in India for a decade but continues to post losses. In FY15, it reported a net loss of Rs 110.7 crore, Rs 142 crore loss a year ago. Net sales were Rs 3,974 crore, against Rs 3,440 crore a year ago. But METRO hopes to be profitable soon.

It recently identified India along with Russia, China and Turkey as its key focus markets. “You need certain scale (20-30 stores) to be profitable and we will soon get there,” said Mediratta. METRO has been focusing on improving its operations by cutting costs and driving efficiencies and discipline.