Metro unveils private label business for mom 'n' pop shops
Global wholesaler Metro Cash & Carry is stepping up private label play in India.
By Urvashi Jha & Boby Kurian, TNN |
BANGALORE: Global wholesaler Metro Cash & Carry is stepping up private label play in India. The German cash & carry major, part of the world’s fourth largest retail group Metro AG, is now peddling distinct private label strategies to its customers across kiranas, mom-and-pop stores, restaurants and hotels in the country.
The private label business, which generates around 10% revenue, is expected to ramp up its contribution as Metro believes that kiranas and mom-and-pop shops will lap it up in their tussle with mainstream brands and for realising better margins. Metro, which entered India through 100% FDI route, is allowed to sell only to customers with sales tax registration number.
Currently Metro has two distinct brands — ARO for smaller retailers like kiranas and mom-and-pop shops, while HoReCa is targeted at restaurants. But Metro is unleashing more private labels across food and non-food categories. This will include Metro tapping the dairy business as well, including the liquid milk segment, under a private brand.
“The share of purchase by hotels in India is very low as compared to our other distribution centres globally.
However, there are over 12 million mom-and-pop stores in India, providing a good customer base to our private labels,” Metro Cash & Carry MD, Martin Dlouhy, told ET. The ramping up of some of these private labels like Active (sportswear), Authentic (apparel ), Lambertazzi (leather products) and others will depend on the response they get from the market.
Metro, which has three distribution centres operating at moment, is working on expanding the capabilities of its key vendors to up its private label action besides store network expansion. “We will convert our local vendors into national vendors,” said Mr Dlouhy.
The private label business, which generates around 10% revenue, is expected to ramp up its contribution as Metro believes that kiranas and mom-and-pop shops will lap it up in their tussle with mainstream brands and for realising better margins. Metro, which entered India through 100% FDI route, is allowed to sell only to customers with sales tax registration number.
Currently Metro has two distinct brands — ARO for smaller retailers like kiranas and mom-and-pop shops, while HoReCa is targeted at restaurants. But Metro is unleashing more private labels across food and non-food categories. This will include Metro tapping the dairy business as well, including the liquid milk segment, under a private brand.
“The share of purchase by hotels in India is very low as compared to our other distribution centres globally.
However, there are over 12 million mom-and-pop stores in India, providing a good customer base to our private labels,” Metro Cash & Carry MD, Martin Dlouhy, told ET. The ramping up of some of these private labels like Active (sportswear), Authentic (apparel ), Lambertazzi (leather products) and others will depend on the response they get from the market.
Metro, which has three distribution centres operating at moment, is working on expanding the capabilities of its key vendors to up its private label action besides store network expansion. “We will convert our local vendors into national vendors,” said Mr Dlouhy.
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Metro is set to enter Mumbai by year-end and Kolkata next year. The cash & carry player plans to speed up its expansion plans in the near future. After Mumbai and Kolkata, Punjab is likely to be on the expansion radar. Besides entering new markets , it also plans to consolidate its position in the existing markets by operating multiple stores. Currently Metro operates two distribution centres in Bangalore and one in Hyderabad.Start a SIP with as low as ₹500 with ET Money App!
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