Metro wants to increase revenue at the expense of Russian restaurateurs

For them, there will be special depots in shopping centers.
The German network of small wholesale shopping centers Metro Cash & Carry decided to restructure the work of stores in Russia to restore business growth. This was told to "Vedomosti" by the representative of Metro Cash & Carry in Russia.

For Metro, the Russian market brings a third of operating income and is among the top three in revenue for the 2016/17 fiscal year ending September 30. The German company wanted to conduct an IPO of the Russian unit, but the plans were not realized because of the beginning of the Ukrainian crisis and the imposition of sanctions by the Western countries against Russia. In recent years, the dynamics of Russian Metro business has deteriorated, and there is no noticeable reversal: in the first half of the 2017/18 fiscal year, Metro revenue in Russia fell by 14.9% to 1.5 billion euros, revenue from comparable stores, ie, 12 months, by 8.8%.

The company wants to increase the share of purchases by professional customers, including merchants, cafes, restaurants, hotels, up to 60% until 2021, its representative said. Currently, such buyers account for about 51%. To this end, Metro introduced three-level pricing in April, offering different prices for piece goods and larger purchases, now it will change the approach to the work of the centers.

Metro will open 24 order execution centers in stores in all regions of presence specifically for customers from the catering and hospitality sector, the representative of the retailer said. This will be a special depot in shopping centers, where the products that most buyers order will be stored. As a rule, it is fresh fish, poultry, meat, fruits and vegetables, goods in a large "professional" package - sauces, dairy products, cereals, etc., lists the interlocutor Vedomosti. Now, according to him, there are five such depots.

This will ensure fast delivery, and Metro without significant investment in the construction of new shopping centers will be able to build a delivery network to professional customers, including in remote regions of the country, the representative of the network explains.

The current business processes in Metro Metro are poorly tailored for restaurants - for point purchases of fairly small lots of high-quality products, said Mikhail Burmistrov, general director of Infoline Analytics. "There is always a lot of competition for restaurateurs, because the purchase price for them is not the main factor, they are more important than the stability of supplies and quality," the expert says. Until now, Metro has not managed to establish a convenient logistics for restaurants and the quality they need, confirms the head of Restconsult, Sergei Mironov: "In fact, buying in Metro is buying a cat in a bag." Although in almost all countries of the presence of Metro - the main partner for restaurants, in Russia it is, in fact, a store for home purchases. Mironov admitted that, as a restaurateur of the Meat & Fish network, he tried to negotiate with Metro, but they did not lead to anything. "It is very difficult to get a personal manager and even a contact with whom you can discuss, if you suddenly brought a wrong product," he shares his experience.

A large retailer by itself can hardly create a restaurant distribution, Burmistrov doubts: it does not just need a separate depot, but the construction of a separate serious business. In his opinion, the approach of "Zelgros" is indicative in this matter: the retailer bought a specialized distributor of products to restaurants, which previously cooperated with them as a partner.