Metro Cash & Carry rebounds in highly competitive food market
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