Goals and strategy

METRO

• sCore growth strategy: Long-term strategy with high growth ambitions defined for the group as well as for the METRO countries and delivery specialists¹ until 2030.
• Strategic value drivers: Focus on HoReCa and professional Traders customers further articulated. Increasing customer value through clear wholesale alignment, multichannel customer experience and digitalisation.
• Strategy implementation: Wholesale transformation as a significant key enabler for the successful implementation of sCore. Multichannel business model and digitalisation further advanced.

sCore growth strategy

METRO has comprehensively revised its strategy in financial year 2021/22. With sCore, the group has established a growth strategy for the period until 2030. sCore emphasises the group’s exclusive focus on wholesale after the completed separation from all retail industry sales lines.

sCore is a growth strategy. The ambitious endeavour until 2030 encompasses more than €40 billion for sales and more than €2 billion for earnings (EBITDA). Long-term growth in the ‘eating out’ segment and the very fragmented competitive environment provide the external conditions for our sales and earnings targets. From an internal perspective, we see great growth potential in a strong expansion of our HoReCa delivery business, the digital sales share with goods and services as well as further growth in our traditional wholesale business. Our different channels and services are closely interwoven. In terms of sales and costs, they complement each other synergistically and do not compete with each other. By 2030, we want to grow our market share by significantly expanding our role as a leading international company in food wholesale. To achieve this aspiration, we want to triple our delivery sales, increase sales in wholesale stores by more than 20% and grow the sales of our online marketplace METRO MARKETS to more than €3 billion compared to financial year 2020/21.

Strategic value drivers

• Wholesale value proposition: METRO’s sCore strategy streamlines the goods and services business exclusively towards wholesale. HoReCa and Traders are our core customer groups. The HoReCa customer group includes hotels, restaurants, bars, cafés, caterers, etc. Traders includes small grocery stores and kiosks. METRO has a wide reach in both customer groups and strives to maximise its customer potential through high customer retention. By 2030, we want to generate more than 80% of sales with our core customer groups. To achieve this goal, we will significantly improve our value proposition for our target customers as part of our sCore implementation in order to further differentiate ourselves from the competition. In addition to a product range explicitly tailored to professional customer needs with a focus on increasing the share of own brands, we will use tiered pricing to reflect our wholesale focus even more strongly than today in our price positioning. We will also ensure the highest possible product quality and availability as well as product, quantity and delivery reliability for the delivery business. To increase our productivity, we will gradually reduce the product range in specific product groups that do not address the professional needs of our core customers.

• Multichannel experience: The delivery business was our key growth driver in financial year 2021/22, as it was before the pandemic. We will continue to strongly expand the delivery channel and our delivery expertise in the course of the sCore implementation. The delivery sales share will increase continuously. This will allow us to address the channel preferences of our customers even better than before. Furthermore, we are opening up access to customer groups who only want delivery, such as in the communal catering sector. By combining the pick-up and delivery business, we serve the different needs of our customers in the best possible way. The online marketplace METRO MARKETS expands our delivery solution to include non-food products with a focus on the needs of HoReCa customers. In order to increase customer loyalty and to tap into additional customer potential, we will further optimise our sales processes and greatly expand customer support through the sales force. This will enable us to offer our customers the best possible and most efficient shopping experience across all channels. Similarly, we will continue to improve the digital customer experience and strongly promote the use of our digital ordering platform M-Shop as well as the METRO Companion app, which already integrates our sales channels. The sales generated through digital channels are expected to grow to at least 40% by 2030. The expansion of METRO MARKETS into other countries will also contribute significantly to this growth. The expansion of the range of digital solutions for the hospitality industry is highly significant in the sCore strategy, and not only in terms of increasing customer retention. The digital solutions also mark the shift from a transactional to a service-oriented and partnership-based business relationship with our customers.

Products for professionals – developed with them

How METRO customers test own brands in everyday business. Insights into a fish and meat tasting in Croatia.

MORE ON MPULSE.DE/EN

• Network optimisation: The self-service wholesale trade sector is the origin of our business and the root of our success. Wholesale stores continue to be pivotal. The role of wholesale stores will change from a pure pick-up store to a multichannel fulfilment centre that ensures the fastest and most efficient fulfilment of our customers’ needs across multiple channels. Accordingly, our wholesale stores will be gradually integrated into the delivery network. Depending on the location as well as the market and customer structure, we will add dedicated delivery-only locations to the existing network in order to realise our sales ambition in the delivery business.
• New business models: sCore also includes the development and scaling of new business models with the goal of acquiring additional segments as customers within our core customer groups HoReCa and Traders. For example, the focus in the Traders segment is on convenience solutions and the expansion of our franchise models. In the HoReCa segment, the focus is on business models tailored to internationally operating key account hospitality customers.

Culinary delights delivered by METRO

Catering to high-end restaurants as well as to large community facilities. A glimpse behind the scenes: who are the METRO delivery companies?

MORE ON MPULSE.DE/EN

Strategy implementation

Our countries continue to play a key role in the successful implementation of our strategy. Accordingly, all countries and delivery specialists have revised their local strategy and aligned it with the content and ambition of sCore until 2030. In connection with the sCore implementation, the portfolio was adjusted for countries that are not aligned with the substantive or quantitative targets of our strategy. With the acquisitions of AGM in Austria for the pick-up and delivery business and Günther Küchen in Germany for our professional service offering, we have undertaken a targeted reinforcement of the portfolio in line with sCore.

The successful sCore implementation requires a cultural change, which we have already initiated with a transformation programme. As part of this ‘wholesale transformation’, we are also reorganising the collaboration between the countries and the central functions. Responsibility for strategy implementation continues to be locally manifested. The objective of the transformation is to realise even greater synergies through standardisation than before, wherever this is possible from a business and operational point of view.

In an effort to provide the best possible support for the local strategy implementation in terms of content and organisation by the group headquarters, we have analysed the sCore strategies of the countries to identify common initiatives and priorities. We will regularly track the operationalisation of the strategy through key figures. We have defined and implemented a key performance indicator system that allows us to continuously measure the strategic value drivers (cf. table ‘sCore key figure system’).

To confirm our sCore multichannel ambition for the wholesale and delivery business, all countries have developed a detailed network plan until 2030 as part of the strategy development. This also gives us a long-term indication of the investment needs in our store network within the sCore strategy. Except for the local sales ambition, the network target vision is aligned with capacity requirements and productivity targets. Based on these parameters, we are able to target investments in wholesale stores, delivery depots and warehouses/transhipment points. Correspondingly, we will increase our growth investments in a targeted manner over the next few years.

What will wholesale stores look like in the future?

METRO MARKETS has now been launched in Italy and Portugal. Together with Germany and Spain, the online marketplace is thus already available in 4 countries. The continued expansion highlights the strategic importance of METRO MARKETS for the multichannel approach as well as for digitalisation. Similarly, the acquisition of Eijsink, a leading provider of cloud-based point-of-sale (POS) systems for the hospitality industry, contributes to the success of sCore. With the acquisition, METRO is accelerating the digitalisation of HoReCa customers under the Hospitality Digital (HD) umbrella. With the POS system, HD not only expands its range of DISH solutions, but also establishes a connection to already existing DISH solutions, such as DISH Order. METRO can now offer its HoReCa customers a comprehensive system consisting of various digital tools with the DISH product family. With this acquisition, METRO has taken an important step towards becoming a multichannel solution provider in financial year 2021/22.