Metro Cash & Carry set for rapid expansion in India

Will invest Rs 2,500 crore in next five years; to open 32 more distribution centres

German business-to-business wholesaler Metro Cash & Carry is set for a rapid expansion in India where it is marking its 12 years of its entry into India.

The Indian arm plans to open six or seven distribution centres annually for the next five years, for a target of 50 by 2020. The investment for these would be in the range of Rs 2,500 crore, a top company official said.

Metro started the first distribution centre in Bengaluru in 2003. It will open its 18th centre in India at a mall in the Binnypet area here. “This is our second centre in 2015 and the fourth in Bengaluru. The first centre this year was opened at Hyderabad last week. We will open two more in the next few days,” Rajeev Bakshi, managing director of the Indian arm, told Business Standard.

Those two new centres would be in Meerut and Delhi, he said. It had acquired these from French retail giant Carrefour SA, which has since exited India.

"Actually, Carrefour had five outlets in India. One outlet in Agra is taken by Walmart and one in Jaipur is closed as the owner of the place is doing some other business there. We have taken three outlets and the first of these will be opened in Bengaluru tomorrow," he said on Wednesday.

Carrefour SA had entered India with a plan to open five outlets, but decided to pull out in July last year after failing to make a mark in the Indian wholesale business. Meanwhile, Metro Cash & Carry, which expanded very slowly till 2011, is now moving rapidly on the path to expansion. The aim for starting 50 stores by 2020 means at least seven new outlets every year.  

"The Indian consumer is changing very fast and is now demanding new things. We were ahead of our time in India and so could not expand rapidly in the first eight years. In the past four years, we have opened 12 outlets," said Bakshi.

Of the 17 current operational wholesale centres, three each are in Bengaluru and Hyderabad, two in Mumbai, and one each in Delhi, Kolkata, Ludhiana, Jalandhar, Zirakpur, Amritsar, Vijayawada, Indore and Jaipur. The 18th, as mentioned earlier, is to start in this city on Thursday, with Rs 70 crore having been invested on it, for a spread over 60,000 sq ft.

Typically, Metro invests around Rs 70 crore for a smaller centre and Rs 100 crore for a bigger one. It has till now opened six bigger outlets — Bengaluru, Mumbai, Delhi and Hyderabad, with the others being small-format outlets. It sells around 10,000 SKUs (stock keeping units) in smaller outlets, while the bigger ones sell in excess of 15,000 SKUs, he said.