You are here: Home » Companies » News
Business Standard

Metro Cash & Carry to roll out 6 small-format stores focussing on kiranas

The wholesale chain currently 27 stores catering to kiranas, Horeca and hospitality sectors; the new stores will be half the size of earlier Metro stores, covering an area of 20,000-25,000 sq ft

Topics
Kirana stores | METRO Cash & Carry | Lockdown

Samreen Ahmad  |  Bengaluru 

Metro cash and carry

As mom-and-pop stores become the toast of the town following the Covid-19 pandemic and the lockdown, wholesale player is tweaking its expansion strategy by putting kiranas at the centre stage.

The German chain will be coming up with six new stores in the next three quarters in priority markets, namely Karnataka, Andhra Pradesh and Telangana, which are going to be kirana-centric. These stores will have assortments focusing only on kiranas. The wholesale chain currently 27 stores that cater to kiranas, Horeca (hotels, restaurants and caterers) and hospitality sectors.

The new stores will be half the size of earlier Metro stores, covering an area of 20,000-25,000 square feet. Currently the company has four wholesale stores that spread above 100,000 square feet with two in Bengaluru, and one each in Hyderabad and Kolkata. Rest of the 23 stores are called Genesis format stores that are spread between 40,000 to 100,000 square feet.

“The construction activities had came to a standstill during the but now it has picked up in the past 45 days and we are close to opening a couple of these new-format stores in October, November and December,” said Arvind Mediratta, MD & CEO,

These new format stores which will be focussing on the traders segment will be launched in smaller towns such as Tumkur and Hubli. The company has also applied cost optimisation programmes which have brought down the capex for the new stores by up to 40 per cent.

“We believe that bigger stores don't mean bigger sales.

It only means bigger costs,” said Mediratta.

ALSO READ: Essential goods to fuel retail industry's growth in coming quarters: Report

Continuing to be bullish on kiranas which generate over 50 per cent of the revenue for the wholesale player, the company has launched an e-commerce platform for deliveries which is already contributing in double-digits to the share of business in four months. Earlier for home deliveries the orders would be taken by its 600 odd salesforce, but it is now being done through the app and is fulfilled within 24 hours. The salesforce is now focusing on adding new customers to the 900,000 user base of kirana players it already has and help in modernising them.

The company has a remodelling programme for kiranans to convert them into supermarkets which is taking their sales up by 40-50 per cent, claims the company. The Bengaluru-headquartered company has also set up kirana success centres in all its stores to give advisory to mom-and-pop players on revamping and competing with online and modern retail.

“If kiranas are successful, our share of wallet will go up as they form over 50 per cent of our revenue,” says Mediratta. The company has seen an up to 20 per cent increase in sales from as compared to pre-Covid levels, especially in segments like processed food and toiletries.

A dampener has been the for the company which contributes 15 per cent of revenue and discretionary spend like apparel and large appliances. The segment saw zero sales during April-May but it picked up later. However, it is still 25 per cent less as compared to a year ago.

Factbox

  • Revenue: Rs 6,563 crore*
  • Total number of stores: 27
  • Average store size: 40,000-100,000 sq ft
  • Kirana network: 900,000
  • Presence in 11 states

*till March 2019, according to RoC documents

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Thu, September 03 2020. 15:49 IST
RECOMMENDED FOR YOU
.