METRO MAGAZINE 4/2019 WHOLE- SALE 360
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METRO MAGAZINE
4/2019
WHOLE- SALE
360
Services
To help our customers achieve
their goals, we are breaking new
ground – and offering financial
support, for example.
MarketplaceEverything restaurateurs need, on 1 platform. From drinking straws to dining sets. METRO MARKETS makes it possible.
ProductsFood and non-food products that make restaurateurs and retailers successful. With 100% quality and local focus.
Digital toolsFor us, more than just a nice ‘extra’.
Useful tools increase efficiency
and create added value. For retailers,
restaurateurs and guests.
EquipmentStrategic cooperation allows integrated solutions – for
example, professional kitchen
appliances on preferential terms.
360 THIS IS
WHOLE-
SALE
Consulting Prerequisite for good advice: understanding. We know the challenges of our customers – and respond with individual-ised consulting.
OUR JOURNEY
FOR FURTHER ARTICLES, PHOTOS AND VIDEOS, GO TO WWW.
MPULSE. DE
2 Appetizer METRO around the world
4 How METRO is shaping the future with Wholesale 360
Olaf Koch, Chief Executive Officer of METRO AG, on challenges, solutions and integrated wholesale
MOVING PEOPLE8 Different every day Entrepreneur Laura Müller
shows us her café Birdie & Co. – and her daily challenges
14 Liquidity made easy Quick and uncomplicated
financial solutions, served à la carte by METRO in partnership with the bank BAWAG P.S.K.
16 Taking the pulse on sustainability
Sustainability is more than just a trend. In a survey, METRO examined what role it plays for customers
MOVING GOODS18 Big change for small shops The Digital Shop app
helps traditional Indian kiranas with digitalisation
24 Original – and fast An answer to rising operating
and personnel expenses: METRO Chef Gourvenience
26 A market where things are happening In a double interview,
Philipp Blome and Daniel Rebhorn discuss B2B commerce and platform economics
30 App(etizing)? For efficient business
processes, digital tools are indispensable. 4 tips for restaurateurs.
MOVING BOUNDARIES
32 METRO: a worldwide portrait
Where do we want to go? To answer that question, we have to understand where we come from. Our origins lie in wholesale. The first METRO wholesale store opened 55 years ago – in its era, a revolution. For the first time, commercial customers could assemble their goods under a single roof and purchase them immediately. METRO now provides a wide range of services in 34 countries. As in the past, we remain focused on our main customer group: independent business owners. Their success is our business. Their challenges are ours as well. For us, wholesale is therefore more current than ever – adapted to profes-sional customers’ needs today.
Our vision for our business, now and in the future, is called Wholesale 360. The following pages provide examples of this integrated approach – the challenges faced by our customers and the way METRO responds to them. Wholesale – for many more years to come. Our origins. Our future. Our journey.
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of visitors say: I learned something new in the LAB.
Success in the fight against food waste: jointly with the company Too Good To Go, METRO res-cued more than 12,000 meals from being thrown away in the Netherlands and Germany between June and September. The partnership is now being expanded to Belgium, France, Italy and Spain. At METRO wholesale stores in the Nether-lands, for example, users of the Too Good To Go app can buy unsold food products at reduced prices shortly before their best-before date. In Germany, METRO uses the app to offer uneaten store restaurant meals for discount prices. Overall in Germany, nearly 90% of all food offered via the app was saved from the rubbish bin – in the Netherlands it was as high as 99%.
99%
of the food offered through the app in the Netherlands was saved – the equivalent of more than 10,000 meals.
USE IT, DON’T LOSE IT
APP
ETIZ
ER
MORE ABOUT THE DIGITAL TRENDS IN THE LAB AT:
At the METRO Campus in Düsseldorf, the future of wholesale can be experienced today – in the LAB powered by METRO-NOM. In a compact exhibition space of 30 square metres, METRO’s tech unit presents digital innovations that have got the industry buzzing – from the robot assistant that helps with product selection to the smartphone app that points out personal rebates the moment the customer steps in front of the shelves. Rotating thematic focuses are designated, each for up to 3 months at a time. In early 2020, everything will revolve around the smart checkout –
that is, technology that lets you pay without waiting at the cash register. Since opening in March 2019, the LAB has proven a real public attraction. The positive
response: 90% of visitors say they gained new insights there. 3 times a week, up to 6 tours are offered. Along with METRO employees, interested members of the public are invited to book a free tour. Contact address: [email protected].
90%
INVITATION TO THE FUTURE
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OWN BUSINESS OWNERS: VALUED BY ALL, BUT UNDER PRESSURE
WWW.MPULSE.DE/ MOVINGPEOPLE
MORE ON THE STUDY AT:
of entrepreneurs would choose to found their own business again.
of consumers are of the opinion:
independent businesses offer good quality.
59% of businesses with their own employees have difficulty finding suitable personnel.
product innovations from start-ups have already been promoted by METRO.
Whether it is cold-brew coffee soda, vegan organic relish or smoky fine-wood vodka: at NX-Food, METRO’s food innovation hub, start-ups are given the opportunity to
test their new products – at selected METRO wholesale stores in Germany and Aus-tria. A number of product innovations have already soared above the clouds: as
on-board catering fare for flight passengers. To make this possible, NX-Food ran a cooperative programme with Eurowings and the on-board service provider
Retail inMotion. From August 2018 to October 2019, passengers were able to choose from creative food innovations like insect bars and vegan corn snacks
offered in the ‘Wings Bistro’ magazine. A total of over 70 innovative newcomer articles were available in the stores and in the in-flight magazine. Some of the product ideas proved themselves in their respective 3-month test phase and were taken up in METRO’s permanent assortment. Interested start-ups can apply at www.nx-food.com at any time for a place on the start-up shelves.
SPRINGBOARD FOR CREATIVE PRODUCT IDEAS
70
52 %
From the popular neighbourhood Italian restaurant to the kiosk on the corner: people value independent businesses – because they allow an individual lifestyle and offer unique products. 80% of consumers wish for even more independent businesses in their surroundings. This is the result of the third representative Own Business Study by METRO, for which 10,000 people in 10 coun-tries were surveyed. Independent business owners worldwide are confronted with the same challenges – for example, a difficult domestic economic situation and a high tax burden. The shortage of trained staff is also an urgent problem: 59% of all own business owners who have hired employees have difficulty finding the right personnel for their company. In addition, 81% consider it essential to use digital tools to design work processes more efficiently. The study results were published by METRO on Own Business Day, which has been focusing on independent entrepreneurs every year since 2016. The initiative is intended to support small and medium-sized businesses and further promote their diversity.
91%
HELPWANTED
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HOW METRO IS SHAPING THE FUTURE WITH
Olaf Koch, Chief Executive Officer of METRO AG
For customers like Laura Müller, METRO is continuously expanding its existing offerings. The story of the Düsseldorf restaurateur: from page 8.
OK
‘Your success is our business. Our entire operating business is geared towards this. Our strategy to fully focus on wholesale is progressing rapidly. Wholesale is our origin. Wholesale is our future – but in a completely new interpretation. Our very clear objective: delivering ever greater value for our customers. That is the foundation for our continuous growth.’
360WHOLESALE
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OK
‘Restaurateurs cur- rently expend roughly one third of their budgets for goods: food, cleaning supplies, equipment. This means that two thirds of their expenditures are made in areas that lie out-side the core business of METRO. For us at METRO, this means that we are searching for ways to help our cus-tomers in other areas. We are expanding our range of products and services for professional customers. We call this Wholesale 360.’
OK
‘We will expand our offerings into complementary areas. Beside high quality products we will offer services, consulting, digital tools, equipment and a fully fledged online market-place. We have already embarked on this journey.’
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PRODUCTS
SER VICES
MARKET PLACE
CON SULTING
EQUIP MENT
DIGITALTOOLS
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OK
‘Our customers are facing major challenges. This is something that we can watch with concern, or we can use it as strong motivation to develop new solutions.’
OK
‘How can you maintain outstanding quality when good employees are becoming increasingly scarce? 1 answer: a perfectly orchestrated kitchen. We work with PENTAGAST to ensure this. PENTAGAST is the leading network for kitchen equipment. When we work together, we create a win-win-win situation: we are able to provide our custom-ers with new products and services. PENTAGAST in turn is able to appeal its customers with METRO products. And more than anything else, it creates greater value for all our customers: they are able to get everything from a single source.’
OK
‘Growth requires efficiency. It is a key factor for our customers – especially when it comes to the cost of goods sold. In the food service industry, a precise calculation of the cost of goods sold is of decisive importance when it comes to running a profitable business. Even the tini-est mistakes can result in huge costs. We have put ourselves in our customers’ shoes. And there’s good news: Heavy work on calcu-lations will finally be a thing of the past. Our digital tool MenuKit helps restaurateurs perform these calculation.’
Better management with digital tools – find out more: pages 30/31.
WWW. MPULSE.DE/EN/ WHOLESALE-360
VIDEO AVAILABLE AT:
Platform models like the METRO B2B online marketplace are booming. Experts discuss this trend: from page 26.
OK
‘All of these activities have a common objective: we want to be the preferred partner of our customers – for all their needs. This means pro-viding great products, but on top being there to advise and assist them. There is something that I would like to make clear here: Whole-sale 360 is an iterative plan and an evolutionary process. That is why Wholesale 360 is not a programme but rather an attitude. It is an attitude that is shaped first and formost by one pas-sion: making our custom-ers more successful. Their success is our business!’
OK
‘“Everything from a single source” was also the idea that led us to the creation of METRO’s B2B marketplace. METRO MARKETS will provide the largest range of products that is available to restaurateurs. The prin-ciple: with METRO MARKETS, we provide our strong METRO brand to other sellers and vendors. Together with them we are able to offer a product range that we would never be able to provide in our stores. How does METRO benefit from this? Well first of all: It’s for the benefit of our customers. Our cus-tomer will be able to access an unbelievable range of products through 1 single platform. This allows us to strengthen the relevance of METRO in customer relationships and create superior growth momentum.’
Close to the customer – all around the world: José Homem, sales force manager at
MAKRO Portugal, and Carlos Ferreira, owner of Sabores na Travessa, in Lisbon. Get the
background story at MPULSE.de.
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Entrepreneurship: not for late sleepers – or the faint of heart.
DIFFERENT.
Thursday, 6.59 a.m. At Birdie & Co., a low light shines from windows that reach to the floor. Inside, a young woman decorates the tables with fresh flowers while her colleague works at the coffee machine. A short way down the street, in Düsseldorf’s Pempelfort district, Laura Müller closes the door to the underground car park behind her. The 31-year-old graduate in special education and social work has a busy day ahead of her, as always. Rising early is part of her routine. Having realised her dream with the launch of Birdie & Co. 3 years ago, Müller is now preparing to open her third deli.
EVERY DAY.
MOVING PEOPLE MPULSE
Next, she gets in the car to drive to the second – the ‘big’ – Birdie. Since 6 o’clock, the kitchen here has been buzzing with the preparations for the day: hummus, pesto, mashed avo-cado and everything else that will be on offer. Müller and her life partner opened their second location in the summer of 2019. In contrast to the ‘little’ Birdie, the larger café has an ample kitchen, storage space and cold storage – allowing the entrepre-neurs to use the facilities even during the renovation work, months before the actual opening, to fill catering orders and prepare dishes for the little Birdie. Because their concept is a hit. For one, this can surely be attributed to the menu: coffee specialities, vegan and gluten-free dishes, everything made fresh from high-quality ingre-dients. From the handmade ‘Energy Balls’ to the ‘Pulled Salmon Teriyaki Bowl’ and ‘Home-made Peanut But-ter’ – with salmon and peanuts smoked and roasted, respectively, in the restaurant’s own kitchen – noth-ing makes it to the table that Müller and her partner haven’t first made themselves, tested and judged to be good. ‘That doesn’t mean that every-thing has to match my taste,’ says Müller. ‘But as if I were serving it to friends and family at home – it has to taste good to them.’
Alternatives meant to taste good
to everyone
Müller isn’t a vegetarian, but eats fish and meat, in her own words, ‘very consciously’. Her goal is to offer deli-cious wholefoods for everyone – so chocolate croissants can be found on the menu along with salads. ‘We don’t want to limit people’s choices, but rather offer alternatives,’ says Müller. ‘And in a way that also tastes good to meat eaters like me,’ her partner con-curs with a wink. There is a second factor in the suc-cess of Müller’s eateries, at least as import ant as the first. It is clear that the woman with the shoulder-length brown hair and dimples means what she says: that she doesn’t serve organic food simply because it is hip, but out of conviction; that she honestly stands behind what she does. ‘I think our guests quickly realised that our top priority is quality,’ Müller explains modestly at 7.30 a.m. at the little Birdie, as she unloads the fully packed boxes of delicacies from the big kitchen. Both cafés are open from 8 a.m. to 6 p.m. When they started, Müller and her partner were here themselves every day, from early morning until the last mopping of the floor at 7 p.m.
Inspiration from London and New York
Blackboard for café counter, class-room for coffee machine: this poten-tial trade tantalised Müller for years, but she always dismissed it as a non-sensical wish. Until the partners dis-covered the little shop in 2016. ‘It was 33 square metres; we thought we could handle that,’ Müller says. They had drawn inspiration from trips to London and New York – and after a short period of consideration, they turned their dream into reality. From the interior design to the choice of skirting boards, everything grew from their own ideas. Their undertaking met with scep-ticism – from suppliers to their own friends and relatives. ‘Our parents weren’t exactly jumping for joy,’ Müller remembers. She had recently finished her studies, was registered to begin her practical training and
was working as a substitute teacher. At 10 a.m., all of the tables in the little Birdie are occupied. A pair of young women with tennis bags and dressed for sport converse over a flat white and a latte macchiato. A mother, with her baby sleeping in the carrier at her breast, sits next to 2 young men breakfasting on ginger and mint tea and sandwiches. Müller’s customers include more regu lars than casual passers-by: the little Birdie isn’t directly visible from the adjacent streets. And the guests don’t only come from the neighbour-hood, as the founders first expected – but often from other surrounding locations, as far away as Cologne. ‘Of course, we hoped it would go well,’ Müller says. ‘But we didn’t know that it would take off like this.’ From a 2-person operation, the busi-ness has burgeoned into a company with more than 30 employees. The daily tasks of the young entrepre-neur have changed accordingly. ‘My work isn’t any less now, just different.’ Success suddenly put such topics as personnel planning and payroll costs on the agenda. An essential point for Müller: only those who treat the guests as she would herself have a place in her team. For this reason, the 31-year-old trains each employee until they are fully ready for the job.
Efficient processes compensate for costs
Third: if you’re going to do some-thing, do it right. That is the standard she sets for herself and her business. The restaurateur works with a single traditional bakery – otherwise, she hardly buys anything pre-made. This business decision poses challenges. ‘Making everything yourself is tre-mendous work,’ Müller admits. And her demand for quality also means that, with the high purchasing costs for ingredients, the marginal return per plate is comparatively low. Birdie & Co. has to compensate for this through especially efficient pro-cesses. ‘We want to support our team with technology that lightens their load, but not at the cost of quality.’ An example of this is the ‘Tropical Birdie’ smoothie, a bestselling menu item. Its main ingredients, mango and pineapple, are available pre-sliced
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Laura Müller and her team share a workplace – and
warm hospitality.
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and frozen. ‘But they don’t taste as good that way,’ says Müller with an apologetic smile. She prefers to buy the fruit fresh, at perfect ready-to-eat ripeness, and then peel, slice and chop it and flash-freeze the portions. This ensures quality – while also creating a huge amount of work. Müller orders pineapple from METRO by the pallet, 300 pieces at a time, which requires at least a day and a half of employee labour to cut. A time-consuming and therefore cost-intensive task – and not the most rewarding one.
Support from METRO and PENTAGAST
When they received their most recent delivery, Müller and her partner related this to their METRO sales force manager. Together they considered whether the tedious slicing and chopping process could be handled more efficiently. The sales force manager then con-nected them with PENTAGAST, Germany’s largest network of food service outfitters. A pro-fessional pineapple slicing machine and other equipment were discussed. This is an example of what the cooperation between METRO and PENTAGAST creates for restaura-teurs: new possibilities for perfectly matched food and technology solu-tions. Equipment that is tailored to the needs of the respective business, from a single source. ‘We’re thrilled that METRO is expanding its offer-ings in this direction,’ says Müller. Where multiple contacts and logist-ical connections used to be necessary, only 1 is now. Müller isn’t alone with her chal-lenges. She is well networked, and she knows the difficulties her coun-terparts in the business face. She attends industry gatherings and maintains an exchange with other restaurateurs. She doesn’t view others who run eateries with similar concepts as competition, saying, ‘We’re happy for every individual restaurant.’ There it is again, her most important trait: authenticity. ‘For us, Birdie & Co. is a source of
personal fulfilment,’ says Müller. ‘Our business model isn’t to drive up sales at all costs. It’s essential to us that we have happy guests who see us as their second living room.’
Each day is different
At the big Birdie, the menu is there-fore considerably larger, thanks also to the kitchen. Lunchtime brings intense activity. Operating the large portafilter machine with fluid ease, Laura Müller serves coffee special-ities one after another. ‘We work exclusively with small roasting houses and give great attention to the coffee’s quality,’ she says. ‘Fair trade as well as the quality of the cof-fee beans are very important to us.’ She explains that she enjoys all aspects of her job, but her favourite place to work is at the coffee machine: ‘I love to be here, greeting the guests right as they come in.’ Due to her background as an educator, perhaps, but above all to her person-ality – even at hectic moments, Müller seems relaxed. ‘Each day, actually, has a surprise in store,’ she says. After the routine start, every working day unfolds differently.
This afternoon, she receives an e-mail from a regular customer seek-ing catering service for a meeting on Monday – in just three and a half days. Müller phones to clarify open questions: How many persons will
food be needed for? Are there any food intolerances or spe-cial requests? After the call, she draws up an offer, checks the expected workload against the shift schedule and dis-cusses the details with her suppliers. ‘We try to make everything possible,’ she emphasises. Her customers value this – just as they ap- preciate the fact that the boss herself tends to their orders. Working at a desk the whole day? ‘I couldn’t imagine it any more,’ Müller replies while packing her things to run a few errands on the way home. ‘The way it is right now is the perfect mix for me.’ With the 7-day work week, the very early start each morning and the unforeseen challenges. And the certainty that every day will end differently.
Modern technology for more efficient processes
Since September 2019, METRO has been working in cooper-ation with PENTAGAST, Ger-many’s largest network of food service outfitters. With the joint solution SMART & EASY, customers can obtain profes-sional appliances like combi steamers and dishwashers at attractive prices. This modern kitchen technology makes pro-cesses in restaurant operations even faster and more efficient.
Ready for anything – with METRO as your partner.
WWW. MPULSE.DE/EN/ WHOLESALE-360
VIDEO AVAILABLE AT:
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MA11Y2ITY
A café operator needs a new refrigerated counter for her cakes – calling for an unexpected 4-figure payment. Or a bar-keeper has to pre-finance the goods he needs for a planned event. For restaura-teurs, financial straits are often a part of doing business. Obtaining bank loans is difficult, often involving a protracted application process. What can be done about it? ‘As a solutions provider, we want to help HoReCa entrepreneurs stay stable and solvent in a challenging market – with financial services custom- tailored to the needs of our customers,’ says Michael Zyber, Director of Business Model Innovation at METRO AG.
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New services help restaurateurs in matters of financing.
Since the start of 2019, METRO Austria has been offering just such financial solutions. In partnership with the Austrian bank BAWAG P.S.K., METRO is making current accounts and credit cards available exclu-sively for restaurateurs. In addition, it is providing specially developed financial services like ExpressFinancing: a loan that can be applied for completely online, without paperwork. A response comes in 24 hours on average, and the principal is paid out the following day. This enables restaurateurs to flexibly secure their liquidity and keep their financial situation well in hand – meaning fewer headaches due to unexpected expenses.
Finances – a perennial issue
Financing is an abiding theme in the lives of independent business owners. In the current Own Business Study from METRO, the 3 biggest challenges entre-preneurs say they face are all in the financial area: as their greatest hurdle, 44% name the economic conditions in their own country; 37%, their insecure income situation; and 36%, the amount of their tax payments. A full 83% of inde-pendent business owners also wish for financial assistance for staff training.
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FIND OUT MORE AT:
At the inter-national sympo-sium ‘CHEFDAYS’ in Berlin, we asked restaurateurs about their experience in the area of finances.
‘ Sometimes business partners are really slow to pay their bills – and when they pay late, our liquidity suffers.’
Guido Weber
AS A FINANCIAL PARTNER.’
‘WITH ITS AUTHORITY IN THE INDUSTRY, YOU CAN IMAGINE
‘ ESPECIALLY IN CASES OF SIGNIFICANT DAMAGE – WATER DAMAGE, FOR EXAMPLE – THERE’S A FINANCIAL SQUEEZE.’
Julian Hansmeier
‘ Unfortunately, a lot of bank consultants don’t have much knowledge of the res-taurant business. I’d like to have contact partners who are really familiar with the industry and offer appropriate solutions.’
‘ WHEN AN EXPEN-
SIVE KITCHEN
APPLIANCE GIVES
UP THE GHOST,
IT INSTANTLY PUTS
A DENT IN YOUR
FINANCES.’
Florian Selle
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METRO surveyed over 6,700 customers in 23 countries on environmentally friendly and resource-saving busi-ness practices. The result: on a scale from ‘completely’ to ‘a little’, ‘not really’ and ‘not at all’, 57% of HoReCa customers feel ‘completely’ responsible for the issue of sustainability, and another 34% ‘somewhat’ respon-sible. But what is actually being done in practice? Top-ping the list of priorities of restaurateurs are waste avoidance, the purchase of local and regional products and waste separation and recycling. However, the big-gest obstacles to HoReCa businesses in implementing greater environmental protection are high costs and the large amount of time necessary. Independent retailers worldwide see the lack of interest outside their industry – for example from public authorities – as a barrier to sustainable action.
The survey also put the role of METRO up for evalu-ation. The results showed that 20% of restaurateurs
‘fully agree’ that METRO supports them in operating their businesses sustainably. A further 57% ‘partly agree’. The possible answers were ‘fully agree’, ‘agree (partly)’, ‘dis-agree’ and ‘fully disagree’. Those surveyed view their suppliers – including METRO – as their most important source for future- oriented, sustainable solutions.
At a glance: who was surveyed?
METRO’s international Sustainability Survey was conducted in spring 2019, with 6,723 customers from 23 countries worldwide taking part – from Austria, Spain and Turkey to India, Russia and China. There was a focus on 3 customer groups: HoReCa business owners, that is, hotels, res-taurants and caterers; Traders, that is, independent retailers such as kiosk operators and petrol stations; and SCO customers, that is, service companies and offices.
TAKING THE PULSE ON SUSTAINABILITY
Whether the issue is the climate crisis, plastic waste or factory farming – more than ever, it is imperative that not only policymakers but also companies ques-tion their own actions with a view to the future. METRO wanted to know: what role does sustainability play in the everyday business of restaurateurs and independent retailers? Answers are now provided by METRO's first global cus-tomer survey on sustainability.
WWW. METROAG.DE/CR-REPORT- 2018-19
MORE ON THE SUBJECT OF SUSTAINABILITY AT:
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Those surveyed expect their suppliers to pro-vide them with information on sustainability. What does METRO conclude from this?
In most countries our customers view us as an important source of information, even above actors like public authorities or non-governmen-tal organisations (NGOs). So we have the unique opportunity to support them both with sustain-able products and solutions and with consultation and advice.
What does that mean in practice?
For one thing, showing our customers why sus-tainability is important for them. By making clear, for example, that wasting food incurs unnecessary costs, which ultimately influence the price the end consumer pays. No one wants to pay unnecessarily. At the same time, we should help our customers to communicate their own commitment publicly. Our digital tools allow restaurants to not only design their operational procedures more efficiently, but also to draw attention to their sustainable offerings, for ex- ample by partnering with the surplus food tool Too Good To Go.
According to the study, how often restaurant guests ask about sustainable products varies considerably from country to country. What are the possible reasons for this?
Different markets are in different stages of devel-opment, therefore awareness of sustainability varies. The perception of what sustainability is also varies. For example, in Pakistan, 74% of respondents said they are asked more than once a month for information on sustainability.
‘The customers provide important input for our strategy’
Sarah Blanchard, Head of Corporate Responsibility at METRO, discusses the results of the international customer survey and what METRO can learn from them.
It could be because quality and food safety are front of mind there. Conversely, in Spain, interest seems to be low, at 26%. We don’t know why that is, as it doesn’t reflect the situation we see in the media. It would be guesswork to say why, and a more detailed look at the actual local situation is needed. This survey provides some first insights and gives us a platform from which to launch more questions.
Customers see regional and seasonal products, especially, as topics with future relevance. Eating just turnips all winter – is that realistic?
That depends on how exciting you make turnips! Joking aside, while there will always be global products like coffee, tea and chocolate, local and regional goods are gaining in importance. We support local producers and promote seasonal products as well as innovative solutions like urban or indoor vegetable gardens. I can say in general that, whether in terms of regionality, energy savings or recycling – the results of the survey are important input for our sustainability strategy.
Just 20% of HoReCa customers completely agree that METRO supports them in acting sustainably. There’s room for improvement, isn’t there?
Yes, because if we flip it around, 80% don’t yet fully agree. If we can’t help them, those custom-ers will look elsewhere. For us, that’s a great opportunity to improve.
Sarah Blanchard
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BIG CHANGE FOR SMALL SHOPSKiranas are as omnipresent in India as the scent of spices. These small, owner-operated shops are more than just a presence in the cityscape and urban life – they are an economic force as well. The little neighbourhood stores account for over 90% of the food retail market. What kiranas often lack, however, is digital tools. And this is where METRO can make a difference – with comprehensive consulting, concrete solutions and a new joint venture.
Maddi B. Reddy’s assortment of goods is as colourful as the streets of Bengaluru, Karnataka. On the shelves of his little shop, customers can find ground coffee and snacks, milk and shower gel – everything to meet their daily needs. Reddy’s shop is one of 12 million ‘kirana stores’ in India. The 40-year-old has been operating his business for 10 years – a period in which a great deal has happened in the IT nation of India.
Coins and banknotes, for example, are a relic of bygone times for many people in major cities like the tech metropolis Bengaluru. For kiranas, where customers traditionally pay with cash, this poses a challenge: although the shops are an integral part of India’s society and economy, they aren’t immune to the increas-ing pressure brought by online competition and digital advances. Reddy is no stranger to this pressure. ‘My customers have explicitly asked me about cashless pay-ment possibilities,’ he says.
With a population of around 1.3 billion, India is a land of contrasts: tradition and cutting-edge technology meet in the world’s second-most populous country. In 2018 alone, over 1,200 new start-ups were regis-tered, primarily in the areas of logistics and transport, software and IT, fintech and online marketplaces.
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Services that involve purchas-ing or maintenance charges, such as card-payment devices, pose a problem for kirana owners, who must either bear the incurred costs themselves or pass them on to their cus-tomers as a mark-up. These services don’t offer any advan-tages in goods management or purchasing.
Highly valued in the neighbourhood – and a true economic power: the approximately 12 million kirana stores in India make up 90% of the country’s food retail market. Due to their small sales space and relatively low stocks, they are significantly simpler to operate than large stores. But they also lack size advantages; kiranas’ profit margin on the individual products is traditionally low.
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Credit option for better goods flow
Along with the payment function, an essential element is a credit option that’s available to kirana operators with just a few taps. With it, METRO customers receive a 14-day credit that they can use for purchases at the wholesale store or for online orders directly via the app. This enables retailers to place orders without having to pay immediately – a major relief in a day-to-day business subject to fluctuating revenue, reports Praveen Kumar Thokla, for example.
‘Before this app was available, I didn’t have any way of applying for a credit so easily, and then using it directly to purchase goods,’ explains Thokla, who has been run-ning his shop in Karnataka's Bengaluru district for 16 years. In his kirana, SRI SAI TRADERS, the 45-year-old primarily sells rice and cooking oil. In keeping with tradition, Thokla used to maintain long lists of his stocks and sales. He now takes care of all of that in the Digital Shop. It makes the task of reordering much faster and clearer, slimming down his shop’s processes and raising its availability of goods. ‘I’ve actually registered a 20% to 25% growth in sales,’ he says.
Strengthening Indian entrepreneurship
2 months after its launch in August, the number of kirana owners using the app was already at 12,000, and still ris-ing. To keep money and time expenditure to a minimum, installation is done on the operator’s own smartphone and takes just 5 minutes. In addition, the integrated ordering option makes inconvenient purchasing trips unnecessary. Analytics and data science played a central role in the app’s development. METRO operates 27 wholesale stores in India, with more than 1 million active customers. Among these, Traders such as kirana owners constitute a core tar-get group.
‘We found a synergy in METRO’s and our approach,’ says ePayLater co-founder Akshat Saxena about the partner-ship. After all, he adds, ‘both companies aim to empower small and independent kirana businesses, as we believe that they fuel a culture of entrepreneurship in the coun-try.’ Offers like Digital Shop, in connection with compre-hensive, individual consultation, are intended to help to ensure that this remains the case. May kiranas continue to be as ubiquitous in India as the vibrant bustle in the nation’s streets.
Partnership with fintech start-up ePayLater
This is where METRO comes in. With consulting services like the Kirana Success Center, METRO has provided digit alisation support to the small neighbourhood shops for some time now. A new cooperation now seeks to lower the transformation threshold even more. Together with the fintech start-up ePayLater, METRO has devel-oped the app Digital Shop. With the mobile application, store operators can track their daily and monthly sales, manage their inventories, place orders – and offer digi-tal payment options by QR code conveniently and free of charge.
Since he installed Digital Shop in August, it has been a decisive success factor for Maddi B. Reddy. ‘Nearly 30% of daily payments by my customers are now made via the app,’ he says. As a vendor, he doesn’t have to pay any charges, and neither do his customers. Both the installation and the use of the app are completely free for customers of METRO. And there is no monthly limit on transactions.
‘Through this strategic initiative with ePayLater, we aim to facilitate a more level playing field for these small and independent businesses, for their continued success in the competitive retail landscape,’ says Arvind Mediratta, CEO of METRO India. Up to now, close to 2,000 kiranas have already been digitalised through the existing Smart Kirana Programme. The new, very user-friendly app is intended to significantly expand these digitalisation efforts.
METRO collaborated with the fintech start-up ePayLater to develop an integrated solution: Digital Shop enables kirana owners to offer all common mobile payment methods via QR code and to digitalise their business operations – free of charge. All they need is their own smartphone, on which the app is installed. Store owners can then also digitally track their daily and monthly sales and easily reorder goods from METRO.
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23MPULSE MOVING GOODS
FAST ORIGINAL –
AND
METRO Gourvenience com-pletely redefines convenience. Whether it is fish dishes (upper right), crème brûlée (lower right) or Swabian Maultaschen (left), the restaurateur can further process the products individually, lending them his or her personal touch.
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MPULSE MOVING GOODS24
Food and technology united
For restaurateurs, it means time sav-ings, as it makes purchasing and prepar-ing numerous ingredients unnecessary. In addition, less waste is produced. This all allows reliable calculations and sig-nificant cost reduction. And the chef receives high-quality products that he can refine for his guests with his distinct-ive touch. ‘With our new Gourvenience range, we offer our HoReCa customers a tailor-made solution to help them to optimally meet the challenges of their day-to-day operations,’ explains Frank Jäniche, CEO of METRO Germany.
METRO goes yet a step further, however. In September 2019, it launched a co - operative venture with PENTAGAST (see article from page 8). This collaboration with Germany’s largest association of food service outfitters is intended to bring even greater harmonisation of technical equipment and food products in the future. One example: a combi steamer that will automatically recog-nise METRO Chef Gourvenience prod-ucts and prepare them at the desired temperature. Gourvenience means a whole new dimension of convenience: fast and efficient professional cuisine of the highest quality for the ultimate enjoyment.
A shortage of trained staff, bureau-cratic requirements and rising operat-ing and payroll costs are putting restaurateurs under pressure. Experts from METRO have therefore put their heads together and developed a pi- oneering solution: METRO Chef Gourveni-ence. This new professional food service line stands for high-quality con-venience products made exclusively for the HoReCa sector. And it stands apart, because it has nothing to do with con-ventional ready-made foods. Rather, it comprises select items for individual processing in the professional kitchen – sourced from specially chosen pro-ducers, without preservatives, flavour enhancers or artificial flavours and col-ours. Gourvenience is part of our own brand METRO Chef and encompasses some 200 products at its launch, from sauces, dips and dressings to meat and fish variations, right through to pastries.
It’s a dilemma: on the one hand, profes-sional chefs seek to win their guests over with quality, flavour and their personal style. On the other, tough competition calls for fast, cost-effective meal preparation. How can these needs be reconciled? With METRO Chef Gourvenience.
25
In the B2C sector, online marketplaces like Zalando, Amazon and Wish are booming. Things are different in the B2B sector: here, platforms are only just starting to emerge and the market has not yet been divided up. An expert discussion with 2 points of view: Philipp Blome, CEO of METRO MARKETS, and e-commerce specialist Daniel Rebhorn in a joint interview about plat-form economics, consumer behaviour, risks and opportunities. ARE HAPPEN- ING
A MARKET WHERE THINGS
A quick look at the current situation: what is the status of online B2B marketplaces at the moment?
Blome: E-commerce has become standard now in the B2C sector, but it is currently on everyone’s lips in the context of B2B, especially in conjunc-tion with platforms. Traditional B2B processes are being improved and restructured by harness-ing digital potential, and value chains are being slimmed down, resulting in large numbers of new platforms. So I think it is a very fluid market.
Which countries are the pioneers in this area?
Blome: When it comes to digitalisation, lots of people mention Silicon Valley, but China is at least as active in this field. For instance, if you look at Alibaba.com and the number of products and services being offered on there now – these are completely different procurement processes. India is another good example.
Rebhorn: In India and China, for instance, we can see that they haven’t even created bricks-and-mor-tar structures in some sectors because they opted for digital business models right from the start.
26 MPULSE MOVING BOUNDARIES
ARE HAPPEN- ING
Philipp Blome (37), CEO of METRO MARKETS, began his career in 2001 at METRO Cash & Carry Germany, before moving to Real SB-Warenhaus GmbH in 2010. He worked in a number of areas, including sales and IT, and was in charge of digital marketing. Before moving to METRO MARKETS, he set up the real.de B2C platform.
Daniel Rebhorn (49), co-founder and Managing Partner of the diconium group, a digital consultancy, is an e-commerce expert who advises companies on issues such as innovation strategies, digital brand management and customer experience.
A MARKET WHERE THINGS
MPULSE MOVING BOUNDARIES
Do platforms function differently from one country to another – or are all consumers wired the same way in the end?
Rebhorn: I think people are not fundamentally dif-ferent. Ultimately, there is a need for the conveni-ence of not having to go anywhere. And for channels that allow feedback. Of course there are cultural dif-ferences, and differences between certain product groups. But the need for convenience, speed and – not least – price savings, exists everywhere.
Nevertheless, B2B platforms differ from B2C platforms.
Rebhorn: Yes, in the B2C area, the aim is often to generate a demand in the first place. A B2B buyer is motivated by completely different factors. They have to make a purchase for their company, so the need is already there, and they are gener-ally repeat buyers. The conversion rate from web-site visitor to buyer is therefore higher for B2B, as is loyalty to the supplier. This has impacts on the customer journey, which means that the user experience has to be designed differently for the platform, the app and online.
What does that mean in practice?
Blome: Platforms like Zalando and About You are all about inspiration. By contrast, if a res-taurateur wants to order 20 more glasses, he does not want to choose from 100 different designs. He needs exactly the same ones that he ordered last time. My job is to make this journey easy for him or her, from product selection to check-out, payment and invoicing. The basics are the same: an attractive price, a fast and reliable delivery, transparency and the right payment methods – although payment methods are more specialised in the B2B than in the B2C area.
When it comes to companies like Amazon, a small number of big players hold a large share of the market. Do you have to be a market leader to benefit?
Rebhorn: I don’t think you have to be Amazon necessarily, but you do have to be relevant in a specific sector. In my opinion, there is space for up to 3 online marketplaces for each product group. This is a position you can expand from if necessary – even Amazon started with one seg-ment and expanded later.
The reputation of platform operators suffers if sellers behave badly, for example by delivering poor quality or customer service. What can they do about it?
Rebhorn: Platform operators have to be able to rely on their partners, but they also have to moni-tor them. That means they need systems like text analysis to identify negative e-mails and assess how much feedback comes from the retailer. In case of doubt, partners are pushed further down the list of product results and are eventually dropped altogether. It is also important to be transparent with the consumer.
Blome: Most partners have their processes well under control though. They know what they are doing. Of course, you need reporting on cus-tomer complaints, tracking points in the logistics chain, and quality processes – even when adding new partners. However, as a platform operator, it is dangerous to manage this issue from a place of fear. If you have too many controls, you will never become a marketplace. There are some platforms where every potential partner has to bring along and demonstrate their products first. It doesn’t work like that.
A prediction for the B2B marketplaces of the future?
Rebhorn: Technology will be a key driver. In the future, if a restaurateur has more table reserva-tions than expected, he or she will ‘Buy this basket again’ with a single click instead of getting in the car for another shopping trip. This will make a huge difference to people’s mindsets and working environments.
Blome: I believe we will see something similar to the B2C situation. Zalando was founded a little over 10 years ago. Everyone thought they were crazy selling shoes online. Now we see the dis-ruptive power that can be wielded by just a few players and how market share has been redistrib-uted. We will see similar significant shifts in the B2B sector. The question is: will the big digital players be new companies financed by venture capital? Or will classic B2B companies manage this transformation better, having learned les-sons over the past 10 years, so they can hold their ground in a digital world? For me, that is the exciting question and our primary objective.
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B2B stands for ‘busi-ness-to-business’ and describes business relationships between 2 or more companies, as opposed to, for example, relationships between companies and consumers (‘B2C’).
B2C stands for ‘busi-ness-to-consumer’ and describes business relationships between companies and end consumers.
Conversion rate indi-cates how many visitors to a website carry out (‘convert’) a certain action. If the action is defined, for example, as ‘purchase’, this key figure represents the ratio of users who visit a website to those who make a purchase during their visit.
Customer journey describes a custom-er’s points of contact with the brand as well as the – in part cyclical – phases in the purchasing process. This process is roughly divided into the pre-purchase phase, in which a consumer gathers information, the purchase phase and the post-purchase phase, in which they evaluate and possibly recommend the product to others.
User experience, abbreviated UX, encompasses all of a user’s experiences and perceptions in their interaction with a product, organisation or service. UX plays a vital role in the design of websites or apps.
Glossary
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The point of a B2B platform isn’t so much to inspire as, above all, to quickly and precisely meet a clearly defined need. The path to the product must therefore be as direct as possible.
29MPULSE
App(etizing)? Digital tools are an integral part of every-day life. And it is almost impossible to imagine the food service industry with-out them: digital solutions play a key role in making business processes and workflows efficient and sustainable. This is why METRO’s tech units – Hospitality Digital and METRO-NOM – are busy devel-oping smart tools. 4 apps that make life easier for restaurateurs.
What prices can I set for my menu? What are my costs? And how much profit will I be left with? Calculating the cost of goods sold accurately in a food service business is like walking a tightrope. But it is vital for a company’s success. Tiny mistakes can lead to enormous costs for café, bar and restaurant owners. This is where MenuKit can help. Thanks to the app, which has been specially developed by METRO and is currently being piloted, complex Excel spreadsheets are now a thing of the past. It can calculate recipe costs quickly and accurately and scale up or down to predict the cost of sales. A special feature of the app is that it displays that day’s METRO shelf prices. In just a few seconds it delivers meaningful results for the best sales price and contribution margin. Restaurateurs can use it to make fast commercial decisions for their menus. Pricing doesn’t get any simpler than this.
MenuKit: goodbye spreadsheets!
MPULSE MOVING BOUNDARIES30
METRO Companion: with you every step of the way
The aim of the new all-round METRO app is to make purchasing easier and give food service providers peace of mind. METRO Companion combines all purchasing steps in 1 application: from setting up a digital shopping list, finding a wholesale store, and checking prod-uct availability and the latest special offers to scanning barcodes and paying invoices electronically. Last but not least, it replaces the METRO customer card and can be used to check in digit- ally at METRO wholesale stores.
DISH app: digital efficiency
DISH (Digital Innovations and Solutions for Hospitality) is a platform that aims to provide hospitality experts with digital tools so that they can run their businesses more efficiently. For instance, if they want to set up a professional internet presence or digitise their reservations system, or if they are looking for support with staffing, DISH is the answer. The platform has also been available as a free mobile app since spring 2019. The staffing tool, Simple Shift, comes pre- installed and is free of charge.
Online reservation tool: google, book, eat
With over 500,000 reservations in 15 countries, the figures speak for them-selves. The online reservation tool from Hospitality Digital is a useful app for restaurateurs, helping them digitise table reservations. Now linked to ‘Reserve with Google’, it enables guests to make table reservations via the tool from within Google searches. Extending the function-ality has proved successful: participating restaurants report a rise in table reserva-tions of around 20%.
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31
WORLD PORTRAIT
WO
RLD PORTRAIT
employees
countries (including 10 with Food Service Distribution)
Own Business Day 2019 worldwide: about 670,000 special offers from more than 6,000 independent business owners
REPORTS. METROAG.DE
METRO FINANCIAL YEAR 2018/19 AT:
5th
million customers (HoReCa and Traders)
Over
About
billion in sales in financial year 2018/19 (total sales, METRO AG)
time consecutively, Industry Leader in Food & Staples Retailing group in Dow Jones Sustainability Index Europe
For the
As of September 2019
wholesale stores
16101,000
27.1About €
Unless expressly stated otherwise, all figures given refer to continuing operations (excluding the hypermarket business and excluding METRO China).
million orders in financial year 2018/19 via the M-Shop
About
5.3
32 MPULSE
IMPRINT
Publisher METRO AG, Metro-Straße 1, 40235 Düsseldorf, Germany PO box 230361, 40089 Düsseldorf, Germany
METRO on the internet www.metroag.de
Corporate Communications T +49 211 6886-4252 F +49 211 6886-2001 [email protected]
Project lead, concept and editorial (same address as publisher) Katharina Meisel
Project management Kim Franziska Lübke, Katrin Mingels
Graphic design Strichpunkt GmbH, Sophienstraße 6, 10178 Berlin, Germany
Editorial support and realisation Ketchum Pleon GmbH, Bahnstraße 2, 40212 Düsseldorf, Germany
Printing Druckstudio GmbH, Professor-Oehler-Straße 10, 40589 Düsseldorf, Germany
Photography Silvio Knezevic: cover, inside front cover, outside back cover, p. 5 Henning Ross: p. 4 top Urban Zintel: p. 4 bottom, 6–13, 26–31
Illustration Holly Wales: pp. 18–23 Strichpunkt GmbH, Sophienstraße 6, 10178 Berlin, Germany
Photo credits METRO AG
Disclaimer METRO AG makes every reasonable effort to provide correct and complete information in this magazine and to not infringe third-party trademark rights. METRO AG cannot accept any liability or vouch for providing information that is up to date, correct and complete in this magazine. In particular, the user is not granted rights of any kind to company names and other industrial property rights held by METRO AG or its associated companies with out the express permission of METRO AG. The reproduction or use of graphics or texts created by METRO AG is not allowed without the expressed permission of METRO AG. METRO AG remains the holder of the copyright to such content. Any use of the industrial property rights held by METRO AG or its associated companies for which approval has not been granted or which abuses the owner’s rights represents a violation of proprietary rights and/or an infringement of fair competition.
You will find a digital version of the METRO magazine MPULSE at: www.mpulse.de/en/downloads.
If you would like to receive the magazine as a print publication, please contact: [email protected].
DESSERTUseless knowledge from the world of food
Dynamite can be made from peanuts. Source: "Rundum gesund. Gesunde Nahrungsmittel, welche unter Umständen lebens-gefährlich sein können.", at: www.rundgesund.com/default.asp?id=5349&opt=1 (accessed 21 Oct. 2019).
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