Reliance Retail acquires METRO ‘Cash & Carry’ for 2,850 crores. What does this mean for them?

Through this acquisition, Reliance Retail gets access to a wide network of METRO India stores located in prime locations across key cities, a large base of registered kiranas and other institutional customers, a strong supplier network and some of the global best practices implemented by METRO in India, RIL said in a statement.

What is METRO AG?

METRO AG started operations in India in 2003 as the first company to introduce a cash-and-carry business format in the country and currently operates 31 large format stores across 21 cities with about 3,500 employees.

According to its website, the Cash and Carry model is primarily defined by its customer base. Under this, registered business customers visit a Cash & Carry outlet, select their own purchases and carry these back themselves instead of placing orders with multiple vendors.

The company serves business customers, “with a wide assortment of up to 50,000 food and non-food products, available under one roof at wholesale prices”, according to its website. The multi-channel B2B cash & carry wholesaler has reached over 3 million B2B customers in India, of which 1 million are frequently buying customers, through its store network and eB2B app.

It currently operates 31 wholesale distribution centres under the brand METRO Wholesale in Bangalore, Hyderabad, Mumbai, Delhi, Kolkata, and Jaipur.

Steffen Greubel, CEO of METRO AG, said, “With METRO India, we are selling a growing and profitable wholesale business in a very dynamic market at the right time. We are convinced that in Reliance we have found a suitable partner who is willing and able to successfully lead METRO India into the future in this market environment.”

How will it add to Reliance’s assets?

“The acquisition will further strengthen Reliance Retail’s physical store footprint and ability to better serve consumers and small merchants by leveraging synergies and efficiencies across supply chain networks, technology platforms and sourcing capabilities. The symbiotic relationship will create greater value for all stakeholders in the retail ecosystem,” RIL said.

During the financial year that ended September 2022, METRO India generated sales of Rs 7,700 crore, its best sales performance since its market entry into India.

Isha Ambani, Director, RRVL, said, “we believe that METRO India’s healthy assets combined with our deep understanding of the Indian merchant / kirana ecosystem will help offer a differentiated value proposition to small businesses in India.”

On its part, Reliance operates networks brands such as Reliance Fresh (supermarket chain), JioMart (online grocery orders), Reliance Trends (clothing) and Reliance Digital (electronics). “Reliance Retail has nearly 200 million registered customers buying across all its formats. It recorded more than 500 million footfalls across all its stores in FY22”, according to its website.

RRVL reported a consolidated turnover of Rs 199,704 crore ($ 26.3 billion) and a net profit of Rs 7,055 crore ($ 931 million) for the year ended March 31, 2022.