October 1, 2023

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Because the chain sends 87% of suppliers to its warehouse

Because the chain sends 87% of suppliers to its warehouse

By Giorgos Lambres

To enhance its centralized operations model, the Metro Group, which operates Metro Cash & Carry stores in wholesale and Souqi in retail, has invested a total of 30 million euros for its warehouses in the Gefyra district of Thessaloniki.

Of this amount, 24 million euros were directed to double its storage capacity, and to create the largest warehouse to date with an area of ​​45,000 square metres. It is usual for the operation of a chain as large as the one in question to be centralized, by supplying all products from the industry to central warehouses and not to local stores. Thus, from 70% of the Group’s sales with products that it directed to its stores through its central warehouses five years ago, this proportion has now increased to 87% of a turnover of 1.501 billion euros in 2022.

Through centralization, most industries send suppliers, with whom they cooperate, to their centralized warehouses. The exceptions are products such as soft drinks and bottled water (they take up a lot of storage space and are cheap) or products that industries sometimes prefer to direct to stores in order to monitor the presence of their products at physical points of sale. With the doubling of warehousing facilities, deliveries from 48 hours that used to take place in stores, are now made within 24 hours.

Basically, the centralization model gives stores the ability to better control their stocks and not create a shortage of products on the shelves, thus, freeing suppliers from the obligation to distribute their products by the same means to every store in every chain.

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Regarding the decision to expand the warehouse, a decision was taken in 2018 and work to start in 2020, to complete the project within 2022. The new facility expansion building was constructed on the basis of a pre-existing property, which was then merged with the existing building. Warehouse facilities. It has 18,500 picking locations, 23,500 storage locations, 76 ramps, refrigerators, freezers, and dry goods storage areas. Infrastructure has also been set up in the field of technology and communications, with the installation creating the largest WiFi6 project in Greece in a single building, with 5km of optical fiber and 20km of Cat6 ethernet cables.

The Thessaloniki Bridge Distribution Center currently serves western, central and northern Greece and has the capacity to ‘serve’ a maximum of 120 stores. It currently serves 22 Metro Cash & Carry stores and 44 My Market stores.

Investment in new logistics hub in Aspropyrgos, 90 new My Markets, move to new Metro Cash & Carry

Through the Gephyra Logistics Center, 860 routes are carried out per month and 1,560,000 boxes are transported. The group maintains 4 distribution centers, in Thessaloniki (45,000 sqm), Oinovita (43,000 sqm), Mandra (21,000 sqm) and Aspropyrgo (4,000 sqm). The group’s plan is to carry out investments of €280 million from 2023 to 2026, when a new, larger warehouse is expected to be built in Aspropyrgos.

According to the company’s president and general manager, Aristoteli Panteliadis, at the moment, the exploratory movements of the group to purchase adjacent plots of land in Aspropyrgos are in an advanced stage, with the possibility of establishing a new distribution center for the total area, which will replace the current two of Mandra and Aspropyrgos. In addition, based on its investment plan, it is planned to add 90 new retail stores to its network through 2025. Most of the new stores that will be established will be part of the “My Market Local” small point-of-sale network and operate in neighborhoods with a franchise model, he mentioned. President and CEO of the Metro Group. Regarding the possibility of adding new wholesale stores to the Metro Cash & Carry network, at the moment the priority is drama but also islands such as Chios, Mytilene, Kefalonia.

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The role of tourism for the wider region

The specific investment in Thessaloniki Bridge is being carried out in a region where tourism investments in Central Macedonia have recently doubled, which also supports the broader market. This parameter was also mentioned by the regional governor of Central Macedonia, Apostolos Tzitzikostas, who was present at the opening of the distribution center. At the same time, approximately 26% of agricultural GDP is produced in Central Macedonia.

We recall that in 2022, the Group recorded a turnover of 1.501 billion euros, a growth of 9.5% (2023 estimate at 1.58 billion euros), profit before tax amounted to 28.3 million euros, an increase of 26.85%, and EBITDA of 60.5 million euros. An increase of 13.3% and a total investment of 50 million euros. Metro is the seventh largest employer in Greece with more than 11,500 employees across the territory.