It is in keeping with the low-key approach adopted by Makro, a subsidiary of German retail and wholesale giant Metro AG. Since opening this outlet, the company's first, in 1972, Makro has grown into the UK's third-largest cash & carry operator and is ranked sixth on our Big 30 list, with a turnover of £1.1bn. Some 8,500 employees work at its 33 C&C stores, servicing a total sales area of three million square feet.
Makro MD Philipp Dautzenberg aims to make those numbers even more impressive by tapping into the trend for fresh, healthy foods. “Everyone needs to find the position where they are unique in the market,” he says. “Ours can be that nobody in the UK cash & carry industry is as good at selling fresh foods as we are.”
Dautzenberg notes that the C&C sector has been slow to commit to fresh foods, because the category is difficult to handle. But he hasn't simply poked his toe in the water. The company remodelled its Charlton store last year to emphasise fresh foods. Product ranges were increased dramatically, more customer relations staff were hired and new services such as a cut-and-collect butchery and a manned fish counter were added. The improvements pioneered at the Charlton store are now being rolled out to other stores.
Makro has coined the phrase 'ultra fresh' as a branding concept for its grouping of fresh meats, veg and fruits and has thrown resources towards improving its range.
Dautzenberg says that the ultra fresh concept will differentiate Makro and help the company increase its market share among small and medium-size catering customers.
Makro has also hired 40 new buyers and customer service managers this year alone for the ultra fresh category. “If a product is easy to source, you don't have any differentiation,” Dautzenberg notes. “We are a great supporter of the big brands, but we have to go further and get products that make the difference. We have a wide range of products and we should really shout a bit louder about it.”
Makro is drawing on the resources of Metro to improve its competitive position and is sourcing non-food products jointly with Metro's global buying team. Makro UK also makes use of other Metro subsidiaries, for example offering a vast range of specialised Italian deli products sourced by Metro Italy. These are delivered through Metro's integrated European logistics network.
However, Dautzenberg cautions that while its global network is important, a local, targeted approach remains the key to its success. This, he says, is why Metro has improved its marketing and public relations skills.
This year, the company increased its targeted marketing. One example is a promotion to coincide with Ramadan. Makro's Ramadan brochure features a vast range of products: mainstream branded items such as Coca-Cola; staples such as basmati rice; catering equipment and halal meats. For Makro, targeted marketing helps differentiate it and shift the emphasis to one-stop solutions.
Dautzenberg thinks that this will create value for customers, many of whom cherry-pick deals from several C&Cs. “We must always be competitive on price, but this takes the focus away from simple product-price repetition,” he says.
He is convinced that the independent sector holds tremendous potential. “There are 2,000 fewer independent retailers every year, but it is still a £20bn market in which we have a very low market share, so there is room for us to grow there.”
He believes the entire wholesale -industry could be doing a better job to help c-stores meet the challenge of the multiples. “Why should beer be a core product for the convenience retailer instead of fresh, good quality produce? The core of convenience should be products with a short shelf life, not ones that shoppers can go to the supermarket and stock up on.”
Looking to the future, Makro is expected to relaunch its Rayleigh, Essex, store early next month.
Dautzenberg confirms that Makro will also completely remodel at least two more stores next year.
Store numbers: 33
Number of employees: 8,500
Growth year-on-year: N/A
Type of operation: Cash & carry