Backed by the mighty Metro, Makro is bent on UK expansion says John Wood

Cash and carry chain Makro is part of a multinational giant that dwarves even Tesco, but in the cut-throat UK retail sector it aims to use its power to support the smaller players in their battle with the major corporations.

Makro’s parent, Metro Group, claims to be the third largest trading and retailing group in Europe and the fifth largest in the world, with group sales last year of more than €51bn, and over 235,000 staff in 28 countries.

Makro buying director Andrew Snowden says: “Since the acquisition of Makro by Metro in 1998, Makro’s buying power has increased dramatically and our pan-European approach to buying means we have 700 buyers in 28 countries sourcing the 30,000 product lines we sell.

“This formula is unique to Makro, providing customers with the high quality products and extensive ranges at the lowest wholesale prices - allowing them to achieve high profit margins.”

This financial muscle is also
helping to fuel an expansion drive by its UK arm which currently has 30 stores. Makro is opening two new depots next month and more are planned.

The group will open a store in Ipswich at the beginning of September, another in Chester at the end of the month, and is finalising planning permission for a store in Wolverhampton. Together with the recently opened Exeter branch these openings will create 1,200 full and part-time jobs.

The first thing that strikes a visitor to a Makro store is the breadth of its non-food range compared with other C&Cs. In addition to the traditional full
grocery offer, there is office furniture, TVs and even bikes.

Snowden describes the concept as a hybrid providing for all the needs of retailers, caterers and other businesses. This means retailers can also buy the computers, staff uniforms and stationery they need to run their businesses.

The company also aims to make the buying experience as easy as possible with easy to navigate wide aisles, and designated checkouts and parking for its higher spending “gold card” members.

Alongside price, availability is crucial to retailers says Nick Johnson, divisional manager operations. He says retailers’ time outside their stores is precious, and Makro does not want them to have to make a second trip because products they need are out of stock. The company has quite high stock levels of fast moving lines, but its sophisticated IT system also enables it to move stock between depots if it needs to.

Johnson can view at any time the stock levels at each depot. If stocks are running low they will be transported from another depot.

The IT can pinpoint which products are bought by a particular customer, and if a store runs out the customer will be phoned to ensure the journey isn’t wasted.

Even though Makro is part of a massive multinational, it ensures a local focus at each of its depots. Johnson says that store managers are given a lot of autonomy about what they stock to enable them to tailor their offer to local tastes.

Categories such as beer and cheese demonstrate a regional bias, and the company is proud of its links with smaller food producers.