Metro AG to split its India ops for sharpening focus

MUMBAI: German retailer Metro AG is splitting its India operations into two divisions and has hired senior executives to head them as part of a strategy to sharpen focus.

Herjit Bhalla, a regional general manager at Hindustan Unilever, is set to join next month as head of Metro’s northern and eastern region operations while Manish Sabnis, CEO of Future Group’s Easy Day, has been roped in for operations in the west and south.

“India is complex, every state is different. We have a model that works and is ready to take off,” said Arvind Mediratta, who joined Metro Cash and Carry India this year as MD. “Splitting it regionally will mean greater proximity to customers.”


The Düsseldorf-based group has identified India as one of its “focus expansion countries” alongside Russia, China and Turkey and will take its store count to 50 by 2020 from 19 now.

With at least four players — Walmart, Metro, Booker and Reliance — operating 92 cash and carry stores, nearly 2.6% of traditional trade in all consumer product goods moves through organised wholesale.

This week, Future Group announced its partnership with British wholesaler Booker Group to open around 70 cash and carry stores. Metro, the first global firm to enter India, is still the largest cash and carry operator in the country. In 2015-16, it posted a 16% year-on-year jump in revenue at Rs 4,629.1 crore, with loss after tax reduced to Rs 91.3 crore, as per the company’s filings with the Registrar of Companies.

In comparison, the Indian unit of Wal-Mart Stores had sales of Rs 3,996.8 crore for the 15 months ended March 2016. While Metro didn’t comment on its annual performance, it said India has huge potential despite newer entrants.

“Opportunity is so huge that we are not worried about competition,” said Mediratta, who joined from Walmart US, where he was working as corporate vice-president for merchandising. Traditional retailers, an important customer group for self-service wholesale trade, continue to act as the most critical channel for Metro, which has been convincing local grocers to use big-format stores as warehouse instead of crowding their small shops with stock.

Within the country, Punjab, Andhra Pradesh and Maharashtra together account for about half of wholesale sales, with soft drinks (12%) dominating the channel in terms of value within CPG space.