Wholesale: Metro boss decrees aggressive growth course
Düsseldorf Metro boss Steffen Greubel has set ambitious goals for the company with his new growth strategy. By 2030, he wants to increase sales from around 25 billion euros today to 40 billion euros, as he announced on Wednesday at the company’s capital market day.
“We now have a great opportunity to gain market share,” he told analysts and investors. He put the total volume of the market at one trillion euros. The company’s annual growth is expected to be three to five percent up to 2025 and increase thereafter.
The market is particularly favorable for Metro because there are hardly any major providers. The three largest providers served less than 30 percent of the market in most countries. “We’re in an attractive market, it’s big, growing and very fragmented,” says Greubel.
Metro therefore wants to grow mainly organically. But that doesn’t rule out takeovers either. Metro wants to “play a role in the forthcoming consolidation of the wholesale industry,” emphasized Greubel.
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For this course, the Metro boss has the full backing of his major shareholders, as the supervisory board says. In the past, the main shareholder Daniel Kretinsky (40.6 percent) had criticized Metro’s slow pace of growth.
Metro stock benefits from the announcements
The stock market reacted positively to the announcements. The price rose at times by more than three percent. For comparison: Last year, the price fell by more than six percent after the capital market day.
The Metro boss made no new statements about the review of the country portfolio. As reported by the Handelsblatt, Metro is considering withdrawing from Belgium and India, which Greubel did not comment on when asked. Metro recently withdrew from Japan and Myanmar.
Under former boss Olaf Koch, Metro had sold subsidiaries such as Kaufhof and Real in recent years and split off the Saturn and Mediamarkt electronics chains. Greubel, who has been at the helm of the company since May 2021, now wants to aggressively drive growth in the core area of wholesale, primarily developing new business areas.
He sees the delivery business as the strongest growth lever. “80 percent of the market is in supply,” said Greubel. Sales in this area are to be at least tripled by 2030. This will not be easy, especially in the important home market. While the share of the delivery business increased in most countries in the past financial year, it fell in Germany from 13.9 to 9.3 percent. Group-wide, the proportion was 17 percent.
The number of sales representatives is doubled
In order to boost the delivery business, Greubel wants to expand the field service significantly. He wants to more than double the number of salespeople in the field, which is currently 6,500.
Greubel also wants to have the Metro branches converted accordingly. The sales areas are to be smaller, and the number of different articles is to be reduced by 30 to 40 percent. The areas that become free will then be used for delivery depots.
The stronger focus on professional customers should also be reflected in the design of the stores. In recent years, they have increasingly become department stores for everyone. “We have to reposition our stores,” says Metro boss Greubel.
There should be significantly fewer non-food items in the branches in the future, and the share of own brands should increase to 35 percent. The presentation of the goods is again geared more towards professional customers: pallets rather than chic shelves.
Metro wants to make around 40 percent of its sales digital in the future
In the future, however, professional customers will be expected to carry out a large proportion of their purchases online anyway. The goal: Around 40 percent of Metro’s business should be digital by 2030. This should also relieve the external service. “Our salespeople should sell, not accept orders,” explains Greubel.
In addition, the web shop for delivery is to grow strongly, and sales are to increase 60-fold to three billion euros by 2030. To this end, Metro is also bringing the online marketplace to other countries. To date, Metro has offered over 600,000 gastronomy-related products here in Germany and Spain.
The ambitious growth course will cost Metro a lot of money. “Now is the time for investments,” said Metro CFO Christian Baier. In the coming years, the entire free cash flow should flow into investments, 2.5 percent of sales are the goal.
This should pay off by 2030 at the latest: The operating profit should then be around two billion euros, the free cash flow around 600 million euros.
“Our ambition is high,” emphasizes Metro boss Greubel. Now the shareholders are waiting for results.
More: New strategy: Metro boss gives up other foreign markets