Business has Improved Since Last Week of July: Metro Cash and Carry’s Mediratta
COMPANY PHOTO well for us because kiranas earlier were very apprehensive in May/ June and even in July. We have set up GST helpdesks in all our stores. Many of them didn’t even know how to apply for a GST number. So, we have people helping them. In India, 40% of the people do not have licence to do retail. Of the remaining, only about 20% used to have VAT (value-added tax) number and the rest used to run their businesses with other licences, like shops and establishment, weights and measure, insecticide, pesticide. So now the tax net could go up significantly.
Has business improved now? The business has improved since the last week of July. Somehow people have moved on. I have also found that during demonetisation, we had a bad November but December was one of our best months and January was again a great month. Similarly, July sales were impacted for almost everyone. July last week onwards the sentiments are back. There was a major supply issue across a lot of companies in July. On shelf availability for products at our stores dropped from 94% to about 80% and is still not back to the 94% level.
When and how will cash-and-carry make money in India? We keep a very low-cost structure and we are doing a lot in turnover. We also own a lot of store properties. Like in Bengaluru we own stores. We own both the stores in Mumbai. We own the one in Hyderabad. One is the cost structure. We also bring efficiency and are stripping off a lot of unnecessary costs. We are able to compete in India because our cost structures are very low. Also, a typical hypermarket would carry 4050,000 stock keeping units (SKUs), but we don’t carry more than 6,000 SKUs in our stores.