Metro Cash & Carry - Strategy

In 2003, “Metro Cash & Carry” was set up in Bangalore. They were a wholesale retail store. They came in with a low cost leadership strategy. They sold a vast array of products at wholesale prices. When they launched their first retail stores in Bangalore, the question on everyone’s mind was, is this the end for the corner grocery and retail stores?

9 years down the line, both seem to be coexisting. The reason why the corner grocery and retail stores didn’t disappear is that these store have a personal relationship with the customers. For smaller and quicker purchases, customers find it easier to go to the store round the corner. It is more convenient. They could even call the store and get the products delivered to their homes. These stores maintain good customer relationship. The second reason for the survival of the corner stores is that at Metro Cash & Carry, customers have to buy in bulk. Hence for smaller and immediate purchases, customers preferred the corner stores.

Metro Cash & Carry brought the wholesale concept to retail stores. Bangalore had many wholesale markets. These markets sold certain type of goods at wholesale prices. Different markets were there for different products. Metro Cash & Carry brought a wide variety of products under one roof and sold them at wholesale prices. This was the first time a retail store was doing this. It was their Blue Ocean strategy. They sold products at low prices, but customers had to buy in bulk. They made their margins on quantity of product sold. They have a differentiating factor from other retail stores that continue to make them successful.

References:

[1] http://www.metro.co.in/metroCCInternational/metroindia.asp