METRO China remains confident on expansion, collaboration plans

Ding Yining
As consumer spending recovers, the retailer intends to open more inland stores and deepen its partnerships with domestic suppliers.
Ding Yining
METRO China remains confident on expansion, collaboration plans
Ding Yining / SHINE

METRO China remains upbeat about the recovery in consumer spending and is eying further expansion in the country as well as deepening collaboration with domestic suppliers to ensure food quality and traceability.

The retailer aims to add five to 10 new stores per year, beginning next year, in inland regions and will continue to diversify offerings for individual shoppers as well as corporate customers. 

"We're confident that domestic consumption will return to normal levels with the resumption of business and school activities, while restaurants and hotels are seeing more traffic," Vice President of METRO China and Offer Management Director Bertrand Mothe said in an interview with Shanghai Daily.

About 40 percent of METRO China sales come from enterprise clients such as caterers, restaurants and hospitality providers. 

METRO started a pilot service at four Beijing stores in May to leverage Wumei Group’s Dmall retail technology solutions to deliver frozen products to extend supply chains for home-delivery consumers. 

In the first month of the trial, the number of delivery orders jumped more than 4.5 times and the service will also be rolled out in other parts of China as online-to-offline shopping becomes essential for retailers.

Wumei Group completed an 80-percent acquisition of METRO China with 1 billion euros (US$1.1 billion) in late April and Dmall is expected to become an essential part of METRO's delivery strategy. 

Huang Hua, head of Ultra Fresh Division of METRO China's Offer Management Department, expects sales of frozen seafood to return to normal levels in the near future.

METRO's salmon sales lost 90 percent in the first week after new cases related to the Xinfadi market were reported in Beijing; but sales returned to 40 percent of normal levels as of last week.  

"We see sales of many segments are getting back on track," Mothe said. "It gives us confidence to meet our original target for this fiscal year."

Huang noted that bulk purchase of packaged fresh food soared in the first half, but took a hit after new coronavirus cases related to a wholesale market emerged in Beijing. 

The retailer also hopes to work with suppliers so its traceability program Star Farm can eventually cover all products in its fresh-food segment. 

One of its aquatic suppliers, Shanghai Mingfen, which has been selling frozen fish and shrimp for over 20 years through METRO,  has made more than 120 fresh, frozen and dried aquatic products traceable. 

Currently about 4,500 types of fresh food and raw ingredient products sold at METRO China can be traced to their source of supply and production, making up about 60 percent of its overall fresh food sector. 

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