Metro AG sales decline 4% during year to September in India

MUMBAI: Metro AG, the country's biggest wholesaler, posted a 7% decline in sales during the year to September, due in part to currency devaluation and the covid-led disruptions in the second half of the fiscal. However, sales fell 4% to Rs 6474 crore in terms of Indian currency basis, the company said.

The German retail and wholesale group clocked sales of Euro 787 million (Rs 7,034 crore) during the year ended September 2020, compared with Euro 848 million (Rs7,580 crore) a year ago, according to its latest annual report.
Excluding the forex impact and market closures due to covid-19 since March, the company would have grown in double digits.


"On a full year basis, our kirana segment grew 24%. However, HoReCa business (hotels, restaurants, catering) declined 26% annually with a lot of restaurants shut since March. Also, non-food categories such as general merchandise, electronics and apparel were impacted and declined 29%," said Arvind Mediratta, managing director of Metro Cash & Carry India.

HoReCa, which accounts for almost a fifth of Metro’s overall business, was still shut in many parts of India for more than four months. Non-food categories too contribute about a fifth to its revenues. "So, sales were impacted despite our fast moving consumer goods segment outstripping the market growth with double digit expansion in food and groceries," he added.

Globally, Metro is the world's fourth largest retailer by revenues. In India, it doesn't sell directly to consumers and is an organised wholesaler or cash and carry operator that sells merchandise to local kirana stores, hotels and catering firms through 28 big box formats stores.

In July this year, its largest rival Walmart that runs a cash-and-carry business under BestPrice was acquired by Flipkart, which also launched its online wholesale business to compete with Amazon and Reliance JioMart. The Reliance entity has partnered with small retailers across the country. Metro, which gets less than 10% of its sales from online, said having a large network of physical stores will help build a stronger hybrid business in India and that it will open stores in smaller towns.

"Omnichannel is the future in India and people still want to touch and feel products before buying. Also, stores help them provide better information about products and insights on catchment areas," said Mediratta.

Metro, in its annual report said, India in particular has been severely affected and reports the second-highest number of infections globally, which is also reflected in a very significant decline in economic output and a sharp rise in unemployment over the past six months of the fiscal year. However, the business is fast reviving with Metro seeing its best ever sales in November.