Our entire supply chain has been disrupted: Metro Cash & Carry CEO

Metro Cash & Carry, one of the largest B2B wholesalers in India, serving 3 million kirana stores and Horeca customers have temporarily closed 8 of its 27 stores in the country due to the nationwide foreclosure. Arvind Mediratta’s CEO, in an interview with Samreen Ahmad, said that company personnel were threatened by the police and that the situation was grim with its stores which only stocked 5-7 days. Edited extracts:

How does Metro Cash & Carry manage the program during this lockout phase? What challenges do you face?

We understand the situation and fully support the government’s decision to freeze 21 days. A critical requirement at this time is that people have access to food, groceries and other essentials. Right now the situation is grim as 8 of our 27 stores are closed and there is a lot of confusion regarding what the notification from the central government has said and how states perceive it. The notice said retail and wholesale food stores would be open, but in states like UP, Punjab and Gujarat, our stores were closed. Even kirana stores are out of stock. We take care of the maintenance of the kiranas, but if the stores are closed and we cannot even deliver, this could lead to serious shortages. Our employees are harassed and beaten by the police. We are in discussions with state level police commissioners to ask for their support and help. The frequentation of our stores fell to 15%.

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When the national borders have been closed, what logistical problems arise?

The supplies have been interrupted since Saturday at the state borders. Our delivery vehicles with essential supplies are not allowed to reach kirana stores. As a result, the entire supply chain was disrupted. We currently keep inventory for only 5-7 days for the most part, which was previously around 15-20 days under normal circumstances. If the situation does not improve, we will have shortages across the country. We also receive requests for supplies from the military and government offices, but if the stores are closed, we cannot respond to them. We are seeking the support of the authorities to allow uninterrupted and smooth operation of our stores. Our employees are as critical throughout the chain as medical workers.

What role can electronic commerce play in such a situation?

The reality is that in this country, 90 percent of the food and grocery activities are still with kiranas. Modern retail is only 8% and e-commerce is only 2% for food and groceries. Electronic commerce cannot spread overnight to meet the entire population of the country. Above all, it holds a larger share in the clothing and electronic products segments. So if the kiranas are not allowed to operate and if they cannot buy from us, this becomes a serious problem.

What measures does the company take for the safety of employees and customers?

We have stopped selling bulk items in our stores and prepackaging products, so there is no risk of infection spreading by hand. We control the number of people entering the stores via a token system. At any given time, no more than 20-25 people are allowed into stores, also after checking body temperature using IR thermometers. Customers and employees receive masks. Hand sanitizers have been placed in approximately 80 to 100 locations inside stores and carts are being disinfected.

Has the business stopped selling non-essential items in stores? Where does most of the demand come from?

Yes, we have stopped selling all non-essential items such as clothing and electronics in the past ten days. We have seen an increase in sales of rice, pulses and cooking oil. Cleaning products have experienced a demand of 70 to 80%. Another category which has seen an increase in demand is that of storage containers which have seen their turnover increase by around 50%. These are data until Saturday. Sunday, everything changed. No one expected a 21-day lockout, or the increase in sales would have been greater.

Are you already witnessing an increase in commodity prices?

Currently, we are not seeing any increase in wholesale prices, but edible oil and pulse prices in the market are increasing by 5-6%. If we are allowed to open, we can control the prices immediately.

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