If you need to know how difficult it is to run a wholesale grocery chain in India, look no further than the topline from the German company that introduced the concept to the country in 2003.
Metro Cash & Carry’s revenue in the fiscal year ending March 2021 was just Rs 6,500 crore (~$835 million). For context, DMart, the Indian supermarket chain that started its journey around the same time as Metro, saw sales over 3.5 times over the same period.
And unlike DMart, a hugely profitable company, Metro is still in the red after trying to hack it for years, even though it’s closer to profitability than it’s ever been before. Metro’s gross margins of around 11% are lower than DMart’s 14-15%.
“You need another level of operational efficiency to support this business,” says a retail analyst at a national brokerage. They and several others quoted in the story requested anonymity as they are not authorized to speak to the media.
It is therefore not surprising that Metro is
would have
would have
The economic period
After 19 years, Metro plans to cash out its India business for $1.5-1.75 billion
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in talks with various companies to sell its India operations for US$1.5 billion to US$1.75 billion.
What is interesting, however, are the types of suitors in question.
There are predictable names, such as Thai conglomerate Charoen Pokphand (CP) Group, which is looking to bolster its three cash-and-carry stores in India. E-commerce giant Amazon and a private equity firm
Capital of Samara
Capital of Samara
Trade standard
Private equity firm Lightspeed receives tender for Metro Cash & Carry’s Indian operations
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who together own the More supermarket chain, are also in the running.
Then there’s Reliance Retail, which exited offline wholesale at the end of 2020, despite being the biggest player. The company turned its 52 Reliance Market cash-and-carry stores in distribution centers for its e-commerce service,
JioMart
JioMart
The Ken
One year after its launch, JioMart’s e-commerce book is still in its first chapter
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.
The most unlikely candidate of all, however, has to be food delivery giant Swiggy. His interest in Metro is linked to ambitious plans for its fast grocery delivery service, Instamart. In December 2021, Swiggy said it would invest in the United States$
700 million
700 million
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Swiggy earmarks $700 million for Instamart amid instant grocery wars
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in Instamart over two to three years.
