Metro reaches consolidation stage

After having opened four stores a year over the past two years, Romania’s most developed trade network Metro Cash&Carry is now determined to change its strategy: 2003 investments will favour intensive development (services) over extensive development (number of stores).
“The decision about opening new stores in 2003 will be made in the second half of the year, ” Delia Nica, PR manager with Metro Cash & Carry Romania told Ziarul Financiar.
The officials say this year will be dedicated to qualitative service development rather than to opening new stores. “The investments will go to people mainly,” the Metro officials say.
The investment required for opening a Metro store is usually worth 15 million euros, with the actual shopping space taking up 6,000 to 8,000 sqm.
When it first came in Romania, the German group had ten stores in mind. It had already opened four stores by 1998 and the change of general manager pushed the final expansion goal up to 20 stores by the end of 2004, so that the development sped up. Subsequently, each of the last two years saw four stores opened, so that Metro has come to total 15 stores, 3 of which in Bucharest after six years in business on this market.
This means there are only 5 stores left to attain the goal and the group has nearly two years to comply.
“Our 2003 turnover target is 700 million euros, given that last year’s target was exceeded,” the Metro official added. She did not care to provide any details as to the profit, though.
Metro expected 600 million euros in sales last year, that is 20% more than in 2001.
The company’s only competitor on this market segment in Romania is Selgros Cash & Carry, held by another German group in the distribution field, Rewe. It entered the Romanian market in mid 2001, when it opened a store in Brasov. It now has four stores opened, two of which are located in Bucharest. Selgros Romania progresses at a 3-5 stores a year pace. Metro also brought its bricolage division in Romania last year, by opening its first Praktiker store in close proximity of the Voluntari-based Metro.