Being one of the largest wholesalers in India, Metro Cash & Carry was able to capitalise on the enormous opportunities thrown up by the Covid-19 pandemic. Arvind Mediratta, MD and CEO, Metro Cash & Carry India tells BW Businessworld that the kirana or mom-and-pop stores became the true backbone of the nation during the lockdown. He shares the learnings and the expansion plans for the company and much more. Excerpts:
How was FY 2019-20 for Metro Cash & Carry India?
It was a fruitful year in which we turned profitable for the second time in a row. Our focus and commitment towards the kiranas and independent businesses continued. We strengthened our ‘Smart Kirana’ programme and have already engaged with over 2,000 kiranas wherein we have helped them with modernisation and digitalisation solutions. Our vision is to empower the kiranas and offer them state-of-the-art solutions that will help them stay competitive as well as thrive in the country’s evolving business environment.
Keeping in mind the current scenario, how do you foresee growth in the Indian market in the next one year and what strategy do you plan to adopt?
Over the next one year, things will slowly begin to return to pre-Covid levels, and growth may be gradual as the world is yet to find a definitive cure. However, we can confidently say that digitisation will continue to play a major role, especially in making businesses and business transactions contactless and cashless.
How is Metro Cash & Carry helping its members digitise and embrace the omni-channel strategy?
Our sustainable solutions like the point-of-sale (PoS) system enable the kiranas to keep track of their inventory, revenue and sales. The storekeepers can also refer to the dashboard and track slow and fast moving items like any other modern retailer. Realising the adoption of technology and digital solutions, we launched our ecommerce app in April.
Customers are primarily buying staples, daily essentials, food and confectionery followed by home and personal hygiene, ready-to-eat, frozen and dairy products. We have seen a lakh- plus downloads of our app in less than three months. Kiranas who are considered conservative also prefer ordering on our app.
The speed of delivery (we assure delivery within 24 hours) clubbed with seamless ordering experience has helped us garner higher orders through our app. Adapting to technology is the need of the hour as well as of the future for the retail sector.
Did the pandemic alter consumer preferences? What trends do you foresee going forward?
Since the Covid outbreak in March, consumer buying behaviour has undergone drastic change. From only buying staples and food, to purchasing ready-to-cook and frozen to beverages, all categories have witnessed their own journey.
Not surprisingly, the pandemic has led to global awareness and improved focus on safety and hygiene.
The non-essential categories like fashion and cosmetics have been hit hard during the lockdown. The impact on the HoReCa (Dutchterm for Hotels/Restaurant/Café) segment will continue as people will prefer not to dine out or stay at hotels.
Offices too will continue to remain shut until the curve of new Corona cases flattens or a cure is found and work-from-home will be the new norm.
How many stores do you have in India as on date? How has been the store performance during the lockdown, and which ones have been the best performing?
We currently operate 27 stores across 17 cities in India. The top 5 best performing centres during the lockdown were Nasik, Hyderabad (two stores), Bangalore and Ghaziabad. Smooth governance and support from the local administration helped these centres outperform the others. We are grateful that we didn’t face any operational issues during these months.
How have the SMEs and smaller businesses been impacted by the lockdown?
The kiranas are our primary customers, they account for 90% of the food and grocery trade in our country and they proved their mettle during the lockdown, becoming the retail warriors of the supply chain.
Online machinery was unable to cater to everybody’s needs. People started panicking and as a result indulged in hoarding products. During such times, the kiranas became the true backbone of the nation. Having understood the prowess of the kiranas, we ensured there was no shortage of supplies for them.
Ecommerce was disrupted as there was no manpower to deliver goods. We also introduced our mobile app to facilitate store-step deliveries to the kiranas directly.
What lessons were learnt post-lockdown?
A vital lesson we learnt was to be pre-emptive and proactive in tackling the crisis in hand. For example, when the supply chain was disrupted and there was a shortage of truck drivers to transport goods from FMCG companies to the markets, we deployed our own delivery trucks to procure and ferry from the godowns of FMCG companies and warehouses to ease the supply chain burden.
Another proactive approach was to scale up our private label brands as big FMCG companies were not able to fulfil demand due to the restrictions on the workforce. This led to increased demand and awareness of our products and was beneficial in boosting our indigenous brands.