1979-1970

Interview with Theo de Raad, Member of the Supervisory Board of METRO GROUP, about the longstanding partnership between Makro and METRO.

"DARE TO EXPERIMENT MORE"


The joint business history of METRO Cash & Carry and the Makro stores owned by the Dutch group SHV that began in 1968 is closely tied to the name of Theo de Raad, 69. The Dutch executive with years and years of retailing experience joined SHV in 1973 and set up Makro's business in Asia as part of his many accomplishments.

Business experiment

When METRO AG acquired all of Makro's stores in Europe in 1998, de Raad joined the Management Board. As a board member, he not only oversaw the complete integration of Makro into the world of METRO, but also led the global business conducted by METRO Cash & Carry. Today, he is a member of the Supervisory Board of METRO AG.  

Portrait of Theo de Raad Theo de Raad, former SHV manager, former Board Member of METRO AG, Member of the Supervisory Board of METRO GROUP


Mr de Raad, how did Makro and METRO become partners in the late 1960s?

One company working on its own can rarely conquer the global market. The partnership that SHV and METRO Cash & Carry agreed on in 1968 was a necessity for both of them to facilitate faster growth. But it took some time before SHV responded to a request by METRO to introduce an innovative cash & carry concept in the Netherlands. 

Why? It sounds like a win-win situation for both parties...

The management had a certain wariness about this completely new business area. And this was understandable because SHV had been involved in the energy and transport business up to that point. But Frits Fentener van Vlissingen, a member of the family that owned the company, saw the potential and overrode the sceptics by saying: 'It's my money. Let's give it a go.' And then  the business experiment began. With the opening of the first store in Amsterdam called Makro Cash & Carry that was a success story from the very beginning, the strategy of the entire SHV portfolio changed in 1968.

Real trailblazing work

How was the expansion in Asia, of which you were such an integral member, carried out?

Beginning in the mid-1970s, we came to the realisation that exciting markets also existed outside Europe. SHV considered the idea of entering markets in the Far East and Latin America. But METRO had doubts about the idea at the time. I was a member of the management team at SHV back then and was sent to Thailand along with a Swiss colleague – that was more than 25 years ago. We did some real trailblazing work there. We scouted out business locations, talked with potential partners and urged the Management Board to take this step. The business was an immediate success – also because we adapted the business model to local needs and kept capital expenditures low. I opened four stores in Thailand. Indonesia came next. No changes were made to the core cash & carry concept. By the way, this was also the case for the Makro stores in Latin America that are still part of SHV today and are continuously growing.

How was the partnership between Makro and METRO specifically structured?

METRO Cash & Carry and SHV split up European countries among themselves – with the exception of Germany. The partnership agreement gave decision-making authority to one of the two companies on a case-by-case basis. The lead company then assumed responsibility for the business and the implementation of the concept in that particular area. The other partner did not get involved at all. The last European country for which Makro assumed responsibility in this manner was the Czech Republic.

Metro Netherlands in 1960s Working with the Dutch group SHV, METRO Cash & Carry introduced its innovative business concept under the MAKRO name in the Netherlands in 1968 – it was the start of a successful international partnership

Entrance Metro Czech The MAKRO name continued to be used after SHV left the cash & carry business in Europe

A long and successful partnership

An impressive success story…

…that functioned smoothly for 30 years on the basis of mutual trust. I know of no other long and successful partnership between German and Dutch companies. This was really something special. At the end of the 1990s, though, SHV decided to get out of the cash & carry business in Europe. METRO AG acquired all European stores in 1998.

What challenges did the Makro integration in Europe create for you?

I was appointed to the Management Board of METRO Cash & Carry by Erwin Conradi, the board chairman at the time, and put in charge of the integration. He knew my successful track record. I'm a real cash & carry man. For this reason, I had the trust of Makro and METRO employees. Things went pretty smoothly in the individual countries. The more difficult job was winning over the Management Board itself. My big personal challenge was speaking German all day because my colleagues hardly spoke any English.

Dutch traders and German engineers

So there were differences between the two companies?

Makro was always a little more easy-going than the German company was. Sometimes, there was definitely too little structure. Occasionally, you had the feeling that two cultures were being melded together – the Dutch traders and the German engineers.  

As a member of METRO AG's Supervisory Board today, what do you think the future of the cash & carry business will be?  

We have been spoiled by success because everything went perfectly for decades. But the entire wholesale world has been changed by online retailing and social networks. For this reason, we need our own fountain of youth, so to speak, and must pay more attention to our customers. We should dare to experiment more and try more innovations without turning our backs on our successful market niche, self-service wholesale trade. This change will take time, and we should take it. 
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