2014-2000

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Interview with Erwin Trinkl, Representative of METRO AG in Russia.

"NO ONE'S ASSORTMENT WAS AS BROAD AS OURS"


Off to the huge country: with about 143 million citizens and a growing economy, Russia is one of METRO Cash & Carry's most important expansion countries. Erwin Trinkl talks about the market entry of METRO Cash & Carry in Russia.  

Deft diplomatic skills required

From the very beginning, Erwin Trinkl has been one of the central figures in the success story that METRO Cash & Carry has written in Russia. From 2001 to 2008, the native of Austrian was a member of the General Management team and administration director of METRO Cash & Carry in the Russian Federation. Today, he heads the representative office of METRO GROUP situated in Moscow.


Russia was not the first country that METRO Cash & Carry entered following the fall of the Iron Curtain. But it was one of the most promising ones. What was so appealing about the Russian market in the beginning?

It was a different time. We had already opened METRO Cash & Carry stores in Hungary and Romania in the 1990s. At the time, the main focus was on meeting people's basic needs. When we launched our Russian operations in 2001, the economy was already on its feet. From the start, customers there expected to find a high-quality product mix with Western brands. But the willingness of government agencies and official representatives to accept modern wholesaling operations was actually stronger in other Eastern European countries.

How did you solve this problem? 

With deft diplomatic skills. I contacted Russian officials and chambers of commerce at once to get a feel for the legal requirements. Contacts and a stable network are critically important. This enables you to gain an understanding of new laws and regulations after they have been approved.

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Erwin Trinkl, Representative of METRO AG in Russia
Since 2001, entrepreneurs in Russia have been able to buy their products at METRO Cash & Carry
Today, around 18,400 employees working in 72 wholesale stores assist customers in Russia

The first steps

For a long time, it was thought that it was impossible to do business in Russia without paying bribes. How did you address this issue? 

We have strict anti-bribery and anti-corruption policies in place, which are compliant with respective international best practices (e.g. UK Bribery Act), and are followed by METRO GROUP in every country, including Russia.

What were the first steps METRO Cash & Carry took in Russia?  

First, a team of experts surveyed the market and potential store locations in 1999. We conduct such feasibility studies very carefully to ensure that we will not experience any unpleasant surprises down the road. The first colleagues went to Moscow in November 2000. Once there, we selected two sites where new stores could be set up most quickly: in November 2001, we opened our doors. Today, we operate 72 stores that have about 18,000 employees in Russia. 

Did you have to start everything in Russia from scratch - or did you learn things from other people? 

When you enter a market, everything must run parallel. You need a piece of property with the right zoning and the appropriate building permit. Service providers must be brought into the process as well. Staff have to be hired and trained for such jobs as purchasing, administration and later for sales. This process takes about a year to complete. In Russia, we drew on the support of our Bulgarian colleagues because we already had METRO stores there and just about everyone in Bulgaria speaks Russian.

METRO as a first mover

How did your first suppliers react to you?  

Initially, the local suppliers were tentative. Their businesses were not designed to supply a wholesale company. For instance, they did not use pallets. We held supplier conferences where we informed them how our orders should look, be packaged and delivered. Six weeks after the first meeting in Russia, everything was being delivered on pallets. As a result, suppliers were equipped to work for other international companies as well.

In what areas do the Russians have their very own special rules - and where did METRO Cash & Carry have to adapt to them?

Accounting practices are different. In Russia, you need a bill of delivery that shows the price, an invoice and the signature of the managing director and the head cashier. Different rules apply to the sale of alcohol as well. You also need a different merchandise management system.

What is the key to METRO Cash & Carry's success particularly in Russia?

As a first mover, we at METRO Cash & Carry have found a lucrative niche. Our customers really like the fresh products, the selection, the prices and the transparency. Above all, they know that they can count on the quality of products - this is particularly important for restaurants. Until we arrived, there was nothing that got close to our comprehensive assortment. 

Cutting-edge technology and precision

How does your logistics system work? 


Logistics is the key to our success. As a rule, every store is designed in the same way, which streamlines processes. We have also built our own central warehouse that has 75,000 square metres of space. Our trucks are equipped with GPS. This allows the travel time and temperature in the cargo compartment to be checked at any time.

What was your personal motivation for putting your energy into further expansions? 

It is fulfilling to see that you have created something totally new. I was fortunate enough to have this experience several times. But you can accomplish such things only if you have an experienced team like ours. 

 

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