Our entire supply chain has been disrupted: Metro Cash & Carry CEO

If the situation doesn't improve we will have shortages throughout the country, says Mediratta

Metro Cash & Carry, one of India’s biggest B2B wholesalers, which caters to 3 million kirana stores and Horeca clients has shut down 8 of its 27 stores temporarily in the country because of the nationwide lockdown. It’s CEO Arvind Mediratta in an interview with Samreen Ahmad says the company’s staff is being threatened by the police and the situation is grim with its stores carrying inventory for only 5-7 days. Edited excerpts: 

How is Metro Cash & Carry running the show during this lockdown phase? What are the challenges you are facing?

We understand the situation and fully support the government’s decision of a 21-day lockdown. A critical requirement during these times is that people have access to food, groceries and other essentials. As of now the situation is grim because 8 of our 27 stores are shut and there is a lot of confusion regarding what the central government notification said and how the states are perceiving it. The advisory said that retail and wholesale food stores would be open but in states like UP, Punjab and Gujarat, our stores have been shut down. Even the kirana stores have run out of stock. We are in the business of servicing the kiranas but if the stores are shut and we cannot even deliver, it could lead to major shortages. Our employees are being harassed and beaten up by the police. We are in discussions with state level police commissioners requesting their support and help. The attendance in our stores has gone down to 15 per cent. 

As the state borders have been closed, what logistics issues are coming up?

Supplies have been interrupted since Saturday at state borders. Our delivery vehicles with essential supplies are not being allowed to reach the kirana stores.  So the entire supply chain has been disrupted. We currently are carrying inventory for only 5-7 days for essentials which earlier used to be around 15-20 days under normal circumstances. If the situation doesn’t improve we will have shortages throughout the country. We are also getting requests to supply to the army and government offices but if stores are shut we cannot cater to them. We are seeking support from the authorities to allow uninterrupted and smooth operations of our stores. Our employees are as critical in the entire chain as medical workers.

What role can e-commerce play in such a situation?

The reality is that in this country 90 per cent of food and grocery business is still with the kiranas. Modern retail is only 8 per cent and e-commerce contributes to a mere two per cent for food and groceries. E-commerce cannot scale up overnight to cater to the entire population of the country. It mostly has a greater share in apparel and electronic goods segments. So if kiranas are not allowed to operate and if they cannot buy from us it becomes a serious issue. 

What provisions is the company taking for the safety of employees and customers?

We have stopped selling loose items in our stores and pre-packaging commodities so there is no chance of infection spreading by hand. We are controlling the number of people getting into the stores through a token system. At any given point not more than 20-25 people are being allowed in the stores, that too after checking the body temperature using IR thermometers. Customers and employees are being given masks. Hand sanitisers have been placed at about 80-100 locations inside the stores and trolleys are being sanitised. 

Has the company stopped selling non-essentials in the stores? Where is most of the demand coming from?

Yes we have stopped selling all non-essentials such as apparel and electronic goods for the past ten days. We have seen an increase in sales of rice, pulses, and cooking oil. Cleaning products have seen a demand of 70-80 per cent. Another category which saw a jump in demand were storage containers which saw an increase of around 50 per cent in sales. This is data till Saturday. Sunday onwards, everything went into a tailspin. Nobody had expected a 21-days lockdown, else sale increase would have been higher.

Are you already witnessing an increase in prices of commodities?

Right now we are not seeing any increase in wholesale prices but prices of edible oil and pulses are going up in the market by up to 5-6 per cent. If we are allowed to open we can control the prices immediately.