Metro Cash & Carry is a wholesale retailer, operating in more than 30 countries on 3 continents. Their business model is based on providing business customers with an opportunity to purchase fresh and various products required for running their companies directly, instead of placing orders through numerous suppliers and vendors.
The outlets of Metro Cash& Carry can be of three types, based on the total store area: Classic, which have the area between 10,000 and 16,000 m2, Junior, with the area ranging between 7,000 – 9,000 m2 and, lastly, the smallest ones, the Eco stores, with the size of 2,500 – 4,000m2. Metro Cash & Carry stores are always located in an easily accessible place, often on the intersection of major roads. For the store oriented to bulk sales, it is important to provide customers with spacious parking lots for their vehicles. Moreover, these stores do not follow the regular opening times, adjusting their schedules to the business hours of their target customers.
Metro Cash & Carry is very different from the other major retail chains by the profile of their customers. Firstly, they target professionals, thus following B2B (business to business) rather than B2C (business to consumer) strategy. They identify their primary customers as the representatives of small and medium HORECA (Hotel/Restaurant/Café) business, the industry segment, providing food services. Before making a purchase at Metro Cash & Carry, one should obtain a member ship card, having identified him/herself as an institutional customer.
In the retail business Metro Cash & Carry virtually has no competitors. Its B2B orientation and self-service wholesale strategy differentiate their outlets from most of the other major retail chains, such as Wal-Mart. The size of the stores as well as the product assortment of more than 50,000 food and non-food articles, leaves all the similar stores far behind. One of the main current competitors is Fegro/Selgros chain, which is far smaller than Metro Cash & Carry.
Research has shown that products, offered in Metro outlets can be purchased in other competing stores, as Cash & Carry mostly sources goods according to the local preferences, and often from the local suppliers. However, their competitive advantage is in the ability to gather all the necessary products under one roof, providing fresh and high quality goods to their customers. This is a part of the brand building strategy of the retailer, an attempt to create an image of a Cash & Carry store as a cheap source of potentially any product, one would need for running a small or medium business. In order to ensure better consumer experience, and to save time of the business professionals, Metro Cash & Carry offers large trolleys, specially designed for large quantity purchases, as well as clearly labels and continuously works on designing the most transparent store layout. Product prices in , Metro Cash & Carry are usually lower, than those of the competitors, due to the economies of scale, derived from bulk purchases, efficient supply chain as well as the Cash & Carry concept, where customers shop for their products themselves,.
One of the biggest promotional potentials Metro sees in international expansion. They actively penetrate new markets, applying the Cash & Carry shopping principles, which are suitable for virtually any economy and respond especially to the demand for low input prices from small and medium business in the emerging markets. They believe that markets in East Europe and Asia have the highest expansion potential, therefore most of the marketing and brand building efforts are pointed in that direction. Sales of € 31 billion in 2010, fast international growth with close consideration of regional and cultural demand patterns, indicate a significant potential of the business success, customer loyalty and long-term growth opportunity for B2B self-service wholesale Metro Cash & Carry stores.
References
Krafft, M., & Mantrala, M. K. (2010). Retailing in the 21st century: current and future
trends. Berlin: Springer Verlag.
Metro AG, Initials. (2011). Metro cash & carry. Retrieved from
http://www.metro-cc.com/dynasite.cfm?dsmid=102636&dspaid=840262
