Intense competition forces Metro AG to review 'India business'
18 January 2022, Mumbai:
Intense competition from Reliance Retail, Udaan, Amazon and Flipkart is forcing Metro AG to review its India wholesale cash and carry business. The company plans to rope in a strategic partner to boost profitability in India. The company has appointed consultancy firm Bain & Company to identify options and plans to make the final decision in the next two to three months. It requires around Rs 6,000 crore from its parent company to fight competition.
Metro has been focusing on profit from global operations and market leadership in food and grocery wholesaling that led it to exit from Japan and Myanmar last year. The company regularly assesses its international portfolio. In FY21, it witnessed a 57 per cent jump in Ebitda. It operates 30 wholesale outlets in 20 cities in the country, catering to more than 5,000 suppliers. It entered India in 2003 after the government had allowed 100% foreign direct investment in wholesale trade on a cash and carry basis. In a 2019 media interview, Metro AG's then CEO said the business had turned profitable.
As per Metro AG's annual report, Metro Cash and Carry India recorded sales worth Rs 6,496 crore at current exchange rate, in the fiscal year October 2020 to September 2021 against Rs6,683 crore, in the year before.
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