German chain, Metro Cash & Carry, wants to open at least two more stores in Delhi, apart from the one announced today. “We have a full city strategy,” said Rajeev Bakshi, managing director, Metro Cash & Carry India. The group aims to launch around seven to eight stores this year in India. Investment per store would be around Rs 70 crore on an average.
The chain’s next stop will be Jaipur around April or May this year. Both in Delhi and Jaipur, Metro will be competing with French retail giant Carrefour. The French group launched Delhi in December 2010 and Jaipur in November 2011. Also, both Metro and American chain Walmart have cash and carry stores in Ludhiana and Jalandhar.
When asked whether there were reasons other than real estate for Metro choosing East Delhi as a location for its first cash and carry outlet in the capital, Bakshi said he could not divulge the exact reasons, but added that the company was working on a full city strategy. Metro has already leased space in West Delhi also, he said at a press conference today, but pointed out that the launch would not happen this year. There are plans for a North Delhi centre also.
The chain has entered three metro cities—Delhi, Mumbai and Kolakata—already, and is looking at Chennai intently. The German group is the only international major to have played it out in the metro cities in a big way. US-based Walmart, in joint venture with Bharti group, is yet to enter any metro, and Delhi is the only metro city where Carrefour is present.
On the impact that 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. There’s no restriction on FDI in cash and carry business.
While Walmart has launched 17 stores across India since its entry into this market in 2009, Metro has 10 (counting the Delhi outlet to be launched tomorrow) since its first centre in 2003. Carrefour, the last entrant into India in 2010, has two outlets.
Cash-and-carry represents an opportunity worth $140 billion (Rs 7 lakh crore) of the $500-billion (Rs 25 lakh crore) annual retail business in India. This format refers to goods sold at wholesale outlets or warehouses. Its customers are retailers, professional users, caterers, institutional buyers and other businesses, who need special licences to buy from these outlets.
