GERMANY: Metro strengthening its position in the home market | Progresiv
Metro is looking to strengthen its position in Germany with a number of strategic decisions. Metro's Real banner has signed a new deal with Privates Handelshaus Deutschland (PHD), Germany's largest private buying alliance, accounting for 7% of Germany's total FMCG trade volume. This follows a trial run between the two groups and will come into effect immediately. The move should help Real to achieve the best purchasing price for its products, strengthening its competitive position in the market. 
The initiative with PHD mirrors steps being taken by Metro at a corporate level and with its Cash & Carry banner, with it recently extending its partnership with France-based Auchan, which has seen Metro entrust Eurauchan – Auchan's French buying organisation – with a mandate for buying negotiations for 2016 on selective and representative product categories and suppliers in France and Romania. In a low growth, low inflationary environment, Metro is looking to remove costs and drive down buying costs where possible, with the initiative with PHD playing a part in this.
Metro Group has invested over 10 million euros in the German logistics network for its Cash & Carry and Real businesses. The new, more efficient infrastructure aims to improve availability, product quality and freshness, as well as strategically strengthening the business by improving the supply chain, and is a forward looking approach.
This follows on from the announcement that Metro will be closing eight Real hypermarkets in Germany, in reaction to the pressure on this format. With customers increasingly using discounters and smaller outlets for their grocery visits, there is overcapacity in the market, particularly affecting the larger stores. Real currently operates over 300 stores in Germany, and will be closing the loss making stores to strengthen the foundations for the wider business, allowing it to focus on the modernisation programme currently underway. (www.igd.com)
