Metro Cash & Carry re­bounds in highly com­pet­i­tive food mar­ket

Kyiv Post - - Business - BY BRIAN BON­NER BON­[email protected]­POST.COM

Three things stand out in the bi­og­ra­phy of Martin Schu­macher, the man­ag­ing di­rec­tor of Metro Cash & Carry Ukraine.

No. 1. He’s well-trav­eled. He’s worked in Ger­many, the United States, the United King­dom, Canada and now Ukraine.

No. 2. He spe­cial­izes in turn­arounds and work­ing in un­sta­ble en­vi­ron­ments.

No. 3. He was born into the food busi­ness. He started out with a fam­ily-owned whole­sale, dis­tri­bu­tion and bro­ker­age firm in his na­tive Ger­many. The en­ter­prise was founded by his great-grand­fa­ther, also Martin, in 1875, and was sold in 1995 by his par­ents, who still live in his home­town of Kem­pen.

“I like to solve com­plex things,” Schu­macher told the Kyiv Post in an in­ter­view. “I got my first busi­ness op­por­tu­nity at our fam­ily busi­ness, which went through sig­nif­i­cant fi­nan­cial re­struc­tur­ing in the early 1990s. I worked side-by-side with my fa­ther to make sure we achieved the fi­nan­cial turn­around of the busi­ness.”

He also was able to ap­ply his turn­around skills to jobs with A&P (The Great At­lantic & Pa­cific Tea Co, Inc.) in Canada and the United States, and at Alix Part­ners in the United King­dom.

When he joined Metro Cash & Carry Ukraine in July 2013 as part of a re­struc­tur­ing team, the busi­ness “was in se­ri­ous de­cline and trou­ble.” He later be­came com­mer­cial di­rec­tor and then, when his pre­de­ces­sor left in Jan­uary this year, Schu­macher took over the top job.

The Metro group, with global rev­enues of €60 bil­lion, is head­quar­tered in Dus­sel­dorf, Ger­many. Metro Cash & Carry Ukraine has 32 out­lets, but only 26 if those in Rus­sian-an­nexed Crimea and ter­ri­to­ries in sep­a­ratist-held Don­bas are sub­tracted.

Sales have reached €500 mil­lion an­nu­ally in Ukraine. That’s progress, Schu­macher said, con­sid­er­ing the bumpy ride that the na­tion and the 4,000-em­ployee com­pany have been on in re­cent years.

“My wife al­ways tells me, when you do one of th­ese projects, you are

Martin Schu­macher umacher

Po­si­tion: Man­ag­ing g di­rec­tor of Metro Cash & Carry Ukraine Na­tion­al­ity: U.S. cit­i­zen; tizen; na­tive of Ger­many Per­sonal: Mar­ried, four chil­dren How to suc­ceed in n Ukraine now: “Be­lieve in the up­side, in­vest a lot of money, out­spend your com­pe­ti­tion and gain in mar­ket share. The con­di­tion for that is you u have to be­lieve in the up­side and you ou have to live with the risk. So cann you live with the risk? Our an­swer nswer is yes. We keep in­vest­ing. ting. We are very com­mit­ted;; we’ve spent more money in this mar­ket than we have ve in a long time to gain in share.” the hap­pi­est per­son,” Schu­macher said. “I’m not a really good rou­tine guy. I need the chal­lenge of an un­sta­ble and un­se­cure en­vi­ron­ment.” He’s come to the right place. But how does one grow sales in a shrink­ing econ­omy, es­pe­cially in the heav­ily com­pet­i­tive area of food sales? Metro Cash & Carry Ukraine cut costs, re­viewed its as­sets, in­ten­si­fied its fo­cus to food, talked to cus­tomers, im­proved sup­ply chains and boosted its ad­ver­tis­ing bud­get.

“Busi­nesses that are strug­gling usu­ally try to do too many things,” Schu­macher said. “You have to make sur sure your prod­uct is bet­ter than it was bef be­fore, and bet­ter than your com­peti­tor itors.’ You have to be open, in­vest in sal sales­peo­ple, (and) in­vest in me­dia to sel sell your story.”

The up­swing started in June 2014, he said, at least in terms of the quan­tity of goods sold.

The self-ser­vice, bulk whole­saler is bro­ken into two parts - busi­ness to busi­ness (B-to-B) sales, sup­ply­ing res restau­rants, kiosks and gro­ceries, and a bus busi­ness to con­sumer (B-to-C) com­pon nent. The B-to-C com­po­nent caters to above-av­er­age in­come cus­tomers who own a car to be able to get to one of the stores, which are usu­ally l lo­cated on the out­skirts of cities.

One big ad­van­tage in Schu­macher’s lin line of work is that war or no war, peo­ple love to eat. “The food mar­ket is very stable in Ukraine,” Schu­macher said. Even in down times, peo­ple still con­sume about 3,000 calo­ries daily.

“There’s a de­cline in some cat­e­gories,” he said. “There’s a shift from higher priced goods to lower, from im­ports to do­mes­tic.” Metro Cash & Carry also has some other com­pet­i­tive ad­van­tages over do­mes­tic

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