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Makro hopes its own brand lines will represent 20 per cent of its sales in Spain by 2012. (Photo: Makro)
Makro unifies brands to augment sales
(SPAIN, 1/11/2010)
The German group Metro is trying to augment its sales by 40 per cent in the Spanish market over the next two years through a strategy of unifying its proprietary brands to lower costs.
Makro Spain is similarly trying to boost sales in 2012 to EUR 312.7 million, with its own brands representing 20 per cent of this tally.
Frans Muller, delegated adviser of the Makro/ Metro Cash & Carry division, acknowledged in an interview with Expansion that “the economic situation is bad in all the countries of the European Union,” but in Spain, in particular, the recession is “is especially severe.”
The German Group, present in 33 countries and which comprises supermarkets Makro/Metro C&C, Media Markt, Saturn, supermarkets Real and Kaufhof Galleries presented its new strategy in its main office in Dusseldorf, which consists of reducing its 50 brands to just six.
From now on, Aro, Fine Food, Horeca Select, H-Line, Rioba and Sigma will be the proprietary brands of Metro/Makro.
Aro will maintain its distinction as first tier price. Fine Food will be the brand with high quality standards, directed to small supermarkets and will include bio/organic products.
Horeca Select will be destined to hotel trade clients and will encompass as much food as kitchen equipment. The H-Line brand has been created for hotels and Rioba offers products and equipment for cafes and bars. Finally, Sigma remains as the name brand for office products.
Muller revealed that the company aspires to increase the sales of its own brands between 10 per cent and 20 per cent by 2012, which would suppose it reaching revenues of EUR 6.0 billion.
The brand downsizing forms part of the plan that Metro has initiated to trim costs to EUR 150 million by 2012, and to therefore improve its results.
During 2008, the volume of sales of Makro/Metro C & C was EUR 33 billion, whereas with the rest of its subsidiaries (Media Markt, Saturn, Real and Kaufhof), invoicing reached EUR 68 billion.
In the nine first months of 2009, however, sales reached EUR 22.2 billion, 7.2 per cent less than the previous year.
The sanitary plan with which the Metro group wants to improve its profits by cutting expenses from now until 2012, has begun to observe results.
According to the company, all Metro sales grew 0.3% in the nine first months of 2009, excluding the effect of currency transactions. Counting the impact of foreign exchange, revenue reached EUR 46.1 billion, that is, 3.7 per cent less.
Meanwhile, the gross operating results of the group topped EUR 748 million from January to September of 2009, against EUR 855 million reached the previous year.
Although Metro has reduced the prices of many food items, Muller insists that the habits of consumption in Spain are absolutely different.
“The food is more diverse, includes more vegetables, fruit and fresh fish,” he explains.
However, according to sources at Makro Spain, the food spending of Spaniards dropped to 16 per cent of their available income, slightly over the Germans, which are one of the lowest of Europe.
Every day, Makro receives a significant variety of fish and shellfish from the major domestic and international ports and. That fish is distributed in less than 24 hours to all Makro warehouses, by means of strict quality controls external to the supermarket chain.
Related article:
- Metro mulling acquisition of Arcandor assets
By Silvina Corniola
editorial@seafood.media
www.seafood.media
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