1989-1980

Interview with Jürgen J. Maas, the retired Chief Procurement and Merchandising Officer of METRO Cash & Carry International, about international purchasing.

"LEARNING SOONER ABOUT WHICH PRODUCTS ARE EMERGING IN MARKETS"


Early in its history, METRO Cash & Carry became an international company that also focused on buying international products. But one commonplace aspect of today's wholesale business took a long time to develop:
the buying of high-quality products in Asia. An interview with Jürgen J. Maas.

Pioneer in the Far East

Jürgen Maas is considered to be one of the pioneers of METRO Cash & Carry's global buying activities. After starting his career in 1962 at the Kaufhof department store company, he worked in many different positions, including at METRO's Gemex buying organisation in Hong Kong from 1982 to 1986. METRO acquired a stake in Kaufhof Warenhaus AG in 1979. After serving in various positions at Galeria Kaufhof, Maas was named Chief Procurement and Merchandising Officer at METRO Cash & Carry.

From the very beginning, METRO Cash & Carry expanded rapidly inside and outside Germany. Sales climbed. In the 
process, the buying sources in Asia that provided the company with products became increasingly important. What made international buying so appealing?


METRO realised very quickly that there were two major advantages to buying products directly in the countries of origin: First, the company gained independence from importers. Second, it learned sooner about which products were emerging in markets. In dealing with similar products from different countries, you can also determine whether you have comparatively good prices. At the same time, you have an opportunity to bundle a product's demand position when the same products are involved. METRO seized this opportunity in the Far East at an early stage: it established the import subsidiary Gemex, where I worked from 1982 to 1986.

By the time METRO Cash & Carry discovered international purchasing, you had already acquired international experience. …

My first international assignment was Japan from 1973 to 1976. We bought things like slippers, toys, tools and cloth in Japan for Kaufhof. In addition to consumer electronics, we also imported pocket calculators - and the fulfilment of orders was subjected to a very tight schedule. The calculators had to be ready by a certain time in order to be loaded into a plane bound for Germany because they were scheduled to be included in a major advertising campaign. Such a practice is unimaginable today.

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Jürgen J. Maas, the retired Chief Procurement and Merchandising Officer of METRO Cash & Carry International
Even in the 1980s, METRO Cash & Carry was using an advanced merchandise management system
The results of international product purchasing: Shelves jammed full with goods from around the world
From the beginning international trade was also subject to the euorpäischen social standards

Two worlds under one roof

In the 1980s, METRO profited from its collective knowledge about how international buying should be carried out. How did this work?

We integrated the business operations of Kaufhof and Kaufhalle under Gemex. The obvious payoff was a commercial one. But the knowledge transfer helped as well. For METRO, there was no doubt that knowledge in the area of products like fashion was greater under the aegis of a department store than it was under the umbrella of a self-service wholesale store. This remains the case today. On the other hand, expertise in the area of food was much greater at METRO than at Kaufhof.

In other words, buying illustrates how the different company cultures that intermingled as Kaufhof was gradually acquired beginning in 1979 mutually paid off. What would you say were the biggest challenges related to the integration of the buying organisations? 

It certainly was the vast differences in the systems. At the time, METRO had the most advanced merchandise management system that provided fascinating data about the business. Kaufhof had nothing like it. Contrary to expectations, the introduction of the system at Kaufhof proved to be difficult and time-consuming. This resulted in high capital-expenditure costs that weighed down the budget for many years. But it paid off in the end.

Pacesetter in sustainability

Today, the buying practices of manufacturers, retailers and wholesalers are being closely monitored by the public. Consumers have developed a greater interest in social and environmental standards at international production sites. To what extent did sustainability impact your buying activities over the years? 

We got involved in the issue at a very early stage and even served as a pacesetter of sorts in terms of sustainability. I served as president of the Foreign Trade Association of German Retail Trade at one point. Under its umbrella, we developed social standards. These standards were later incorporated into the Business Social Compliance Initiative (BSCI) that is now based in Brussels. This is now a very successful, voluntary model of business. 

What does this mean specifically? 

For starters, we incorporated things already addressed in our laws into the buying terms for procurement markets outside the EU - as a contract condition. But a clause in a contract does not go far enough. You need someone there who can monitor activities. For this reason, we decided to have a neutral third party assume this responsibility as a way of increasing credibility and enforcement. We wanted to train our suppliers and improve their business practices from the very start.
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