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Market MAKRO Cash & Carry CR is the largest Czech self-service wholesale store aimed at professionals in the areas of independent retail and catering. It is a part of the multinational group METRO Cash & Carry International, which operates in 28 countries with 584 cash & carry centres located around the globe, employing over 83,000 people. METRO Cash & Carry International is number one on the international self-service wholesale market, with the group attaining a turnover of €30 billion in 2006. METRO Cash & Carry is a sales division of the Düsseldorf based METRO Group, one of the most important groups doing business in Germany and one of the largest trade and retail groups worldwide, reporting annual sales of € 60 billion in 2006. The group’s sales divisions also include Real, Extra, Media Markt, Saturn and Galeria Kaufhof. As a part of the fast-moving development of the post-revolution Czech market in the 1990s, the market share held by the top ten chains increased six-fold and their aggregate turnover rose eight-fold. Despite strong competition, MAKRO has remained the long-term leader on the wholesale market. In the Czech Republic, the network of MAKRO is made up of twelve wholesale centres. The majority of these stores have a sales area of 10,500 m², and the smallest store has 6,000 m² of sales space. All centres are easy to reach and are located near main thoroughfares and have extensive car parks for customers. The centres themselves are equipped with the latest merchandise storage and distribution technology and feature highly powerful cooling units in the refrigerated and frozen food sections. MAKRO customers can be divided into three main groups. The first of these are small, independent retailers who primarily buy goods for resale. Secondly there is the Horeca (hotel, restaurant and catering) sector that uses purchases at MAKRO for providing a wide range of services. The third group is general business owners who mainly buy office supplies, food and appliances for their companies. Achievements MAKRO launched its operations on the Czech market in 1997, when three branches were opened within a threemonth period, and by 2002 ten wholesale stores were already open throughout the country. Today, customers view MAKRO as the largest 48 SUPERBRANDS and most competent wholesale chain in the Czech Republic and a whole series of awards support this. From 1999 to 2005, MAKRO ranked first on the list of the top ten chains according to turnover and in 2005 MAKRO received the Zlatý dukát (Golden Ducat) award. The company is regularly ranked among the top 100 most admired companies (Czech Top 100) and was also elected Top Retailer 2002-2003 and 20042005. Since 2003 the chain has regularly received the Multiservis Retailer of the Year award. History MAKRO Cash & Carry CR was originally established as a subsidiary of SHV MAKRO, one of the largest resale groups worldwide. As of 1st January 1998, however, METRO Group took over all of SHV MAKRO’s wholesale activities. In 1997, sales in three self-service wholesale centres were launched within the Czech Republic: in Ostrava–Hrabová, in Čestlice (a suburb of Prague) and in Brno. From 1998-2005 stores were opened in Ústí nad Labem, Velká Bystřice, Prague’s Černý Most and Stodůlky districts, České Budějovice, Hradec Králové, Pilsen and Zlín. The twelfth and, for now, the last centre was built in Liberec in 2005. Between 2002-2005 the entire network of stores underwent extensive modernisation with the aim of changing the sales area layout and applying the latest methods to merchandise quality. This way MAKRO was able to differentiate itself even further from its main competitors. The stores were reorganised and equipped with modern lighting systems and each centre now has a covered car park available for customers who are MAKRO Partners. Parallel to this, the non-food sections were expanded significantly and the strategic food service and office supply sections, enhanced with new product ranges, were relocated closer to the entrance to the store. The fresh food section was expanded by as much as 25% and the fruit and vegetable, fresh fish and dairy sections were moved to a separate air-conditioned space, with a special room set aside for fresh fish and dairy product sales. The wine section also underwent a comprehensive reconstruction. In 2006, another round of remodelling was started at the Prague Stodůlky store. The range of services was expanded, product ranges were enhanced and further specialised, and the practical organisation of merchandise within the store was also changed, with the assortment of meat and frozen foods, fresh fish and gourmet foods registering the greatest growth. The wine section was also doubled and expanded by opening of a wine humidor. Similar changes in other centres are continuing throughout 2007. As a part of its additional customer services, MAKRO has gradually built a network of petrol filling stations covering the entire chain of wholesale centres. In 1999 electronic data interchange (EDI) was implemented at the chain. This set of standards allows more flexibility in working with suppliers and ensures that the stock replenishment process is smooth. to reduce inventory and storage space, translating into a decrease in overall costs. The product range is constantly changing and adapting to the client structure, and this gives retailers space for creating individual assortment in their own stores and setting themselves apart from the competitors. MAKRO customers can use flexible service, quick reaction to their demands and, last but not least, an individual approach. The result is that MAKRO Cash & Carry CR does not compete against small businesses, but is a partner of small businesses and helps the sector compete with retail chains. In recent months, MAKRO has also been fully engaged in carrying out new projects as part of its support for independent retailers, gradually arranging the complete redesign of five different small independent shops. These sample stores, operated by registered MAKRO customers, are undergoing reconstruction and adaptations on the basis of the latest professional sales expertise. The first to undergo redesign was a grocery store on the main square in Pyšely; to be followed by another four stores in the course of 2007. Another recent innovation is the establishment of the new MAKRO Food Service division. Thus, MAKRO now has a full team of both sommeliers and professionals available to assist in changes of product assortment in the grocery section, following the latest information and trends in the food service sector. The Food Service division also arranges customer training sessions aimed at the professional preparation of various food products. Essentially, it teaches how to get maximum benefit from the fresh, high quality foods MAKRO offers. Recent Developments Ever stronger competition amongst resellers in the Czech Republic is creating constantly increasing pressure on prices, and the fight for customer loyalty is becoming fierce. MAKRO’s effort is to offer merchandise at a price that is attractive enough for resellers and other businesses, creating and offering added value. Product The cash & carry concept makes it possible to pay “cash” for merchandise and “carry” it away. MAKRO is the professional’s first choice, offering quality, innovation and comprehensive solutions and allowing customers to focus on their particular needs. Besides a range of 74,000 products all under one roof, this system also represents additional advantages, including the union of high quality and low prices and a whole line of low-priced private brands that increase variety in the store’s product range. This all allows small and mid-sized retailers and other businesses As early as 2002, MAKRO introduced a labelling system that makes it possible to find the origin of a specific product and this traceability feature is used for various types of meat and certain types of fruit and vegetables. In 2006 MAKRO, as a major seller of fresh fish in the Czech Republic, started co-operating with a newly opened fish platform in Prague’s Čakovice district – the only one of its kind in Central and Eastern Europe. This is where the MAKRO fish buying department is located, and MAKRO receives all fresh fish from local and international suppliers exclusively via this platform. As a result, the delivery time has been cut by as much as two days which means that goods get to the customer significantly faster, and guarantees that the fish products are as fresh and of the highest quality possible. A Partner Service Desk where consultants tend to Gold and Silver Partners is available to customers in each wholesale centre. Additional sales representatives visit restaurant owners and independent retailers right at their places of business and, together with customers, find ways of innovating their product assortment or services. segment, and MAKRO Gastro for the Horeca segment. These magazines give information on the services and products on offer and practical advice about operating retail stores or food service facilities. Besides this, MAKRO uses in-store promotion (posters, fliers, in-store radio, commercials on large screen televisions, advertisements on skyscrapers, cashier receipts, dynamic panels etc.) as well as out-of-store promotion (flags, billboards, signs at shopping cart corrals, website, direct mailing). Taste tests held at the centres also increase the customer’s level of information about current and new products. Brand Values One of MAKRO’s strategic aims is to offer maximum care customised to the customer’s specific needs and this is the main criterion in all phases of the decision process at MAKRO. Its position as one of the largest resellers on the Czech market allows it to offer top quality at reasonable prices and make significant long-term investments into quality. As a result, MAKRO is able to offer premium quality that corresponds to customers’ individual interests in the area of groceries and consumer goods, as well as professional services in the form of consulting, selecting items and recommending possible changes to the assortment or menu the customer offers. www.makro.cz Promotion The Quality Control Department of MAKRO was created in 2002 and is now an essential part of all major processes, watching over goods during the whole delivery process from the producer all the way to the MAKRO store, and also overseeing the quality of customer service. In an effort to make high quality merchandise more affordable for customers, MAKRO also created its own line of private brand goods and this line is being continuously expanded with, by mid-2007, over 1,200 Aro brand products offered for sale. The Aro brand guarantees retailers the best price at a standard quality. METRO Quality products, mainly designated for food service facilities, also offer high quality at a reasonable price. Up-to-date circulars are MAKRO’s main and the most effective marketing tool. These are sent to registered customers’ addresses and inform them of the main range of groceries and consumer goods. Relevant customer groups also regularly receive subject-specific offers which include, for example, the office supply catalogue, a special food service catalogue (Asian and Italian cuisine), catalogues for newsstands, pubs etc. Specialised Epikure catalogues are a new feature and are dedicated to selected categories (such as fish, wine, cheese). Epikure not only presents MAKRO’s product range to customers, but also makes recommendations on the use of the ingredients. After entering the registered customer’s access code, all current circulars can be downloaded from MAKRO’s website.The company also publishes two customer magazines – MAKRO Profi for the independent store THINGS YOU DIDN’T KNOW ABOUT: Makro › 90% of the merchandise at MAKRO Cash & Carry CR centres comes from local suppliers. › The number of registered customers is over 800,000. › 95% of all Czech restaurants and 92% of all grocery stores shop at MAKRO at least once per year. › The MAKRO website has an average visitorship of over 1,000 customers per hour during peaks. › Every day each MAKRO wholesale centre sells 12 full truckloads of goods; before the Christmas holidays, this amount doubles. SUPERBRANDS 49