Reliance Retail may convert Metro Cash & Carry stores into B2B outlets

They may not be converted into hypermarkets and supermarkets as many are on city outskirts

Reliance Retail is expected to convert METRO Cash & Carry India stores into its B2B stores, which cater to bulk buyers and kirana stores, according to a person in the know.

These stores are expected to be rechristened Reliance Market. They will also be used as fulfilment centres for Reliance’s consumer-facing businesses, such as JioMart, the source said.

Though it would be easy for Reliance Retail to convert METRO Cash & Carry stores into hypermarkets and supermarkets because the FDI norms wouldn’t apply here, this is not feasible because a number of them are on the outskirts of cities where footfall is limited.

Reliance Market started operations in 2011 and currently has 52 stores and 4 million members, according to its website.

With the completion of the acquisition of Metro Cash & Carry’s India business, Reliance Market would add 31 stores to its network in 21 cities. It would also boost its reach to over 3 million B2B customers, of which 1 million are frequently buying customers, through its store network and eB2B app.

On December 22, Reliance Retail announced that it signed a definitive agreement to acquire a 100 per cent stake in METRO Cash & Carry India for a cash consideration of Rs 2,850 crore, which is subject to closing adjustments.

ICICIdirect, in its report on the acquisition, said the company bolstered its offering and continued to fill white spaces through acquisitions, and spent nearly Rs 10,000 crore in FY22. “Its recent acquisition of METRO’s wholesale business (B2B) for a consideration of Rs 2,850 crore would further strengthen its backend supply chain with accelerated growth in JioMart Kirana orders (up 4x YoY) and on-boarding of new HoReCA (hotels, restaurants, and catering) clients.”

Morgan Stanley said that RIL’s acquisition of METRO’s B2B business should support its new commerce strategy and expand its presence in metros and Tier 1 cities with large format multi-category stores.

The report added with $1 billion worth of bolt-on acquisitions in retail and the recent launch of its own brand, it expects RIL to remain aggressive in its retail strategy.