METRO GROUP radically modernises its logistics network in Germany

18 September 2015

  • Logistics to become significantly more competitive thanks to new locations and more efficient processes
  • Investments in the high double-digit million euro range – gradual shifting of locations
  • Modern logistics infrastructure supports repositioning of METRO Cash & Carry and Real
  • Customers benefit from higher product availability, quality and freshness
  • Annual savings potential in the medium double-digit million euro range expected from more efficient processes and leveraging of synergies

The METRO GROUP sales lines METRO Cash & Carry and Real are to get a much more modern and efficient logistics infrastructure: the Düsseldorf-based retailing group is investing a high double-digit million euro amount into a new, nation-wide logistics network in Germany. Four modern logistics centres, a greater centralisation of the goods flows and adjustments at the existing locations are to significantly improve the product availability, quality and freshness for the sales lines. Another aim of the new structure is to strengthen the new strategic businesses of the sales lines, like for example delivery. In the framework of the reorganisation it is planned to have the logistics services of the now seven locations performed by three new, more modern and larger logistics centres and one extended location and thereby handle significantly higher volumes. As many affected employees as possible are to be offered a job at the new locations. Overall, the new logistics structure will involve roundabout the same number of jobs as now. All implementation steps will now be discussed with the competent bodies.

With the reorganisation of its logistics network METRO GROUP wants to even better meet the needs of the business and logistics strategies of METRO Cash & Carry and Real in the future. To this effect, the company plans to integrate three new logistics centres into its warehouse network during the period from early 2017 to mid-2018 and extend one existing location. In addition, existing locations are to be adapted with regard to their assigned tasks, space and assortment. "Competitive logistics play a key role in the successful repositioning of METRO Cash & Carry and Real in Germany. That is why we decided to strongly invest into the modernisation and optimisation of our logistics", says Mark Frese, Chief Financial Officer of METRO AG. "Our goal is to create one of the most modern logistics networks in Germany. In the future, logistics will align itself much more with the new strategic business areas of METRO Cash & Carry and Real which depend to a large degree on an ideal supply chain management. These include the delivery business, smaller city centre formats or multi-channel solutions, for example."

The existing warehouse network of METRO LOGISTICS is outdated in many respects in terms of the location and building infrastructure of the centres. That is why it could not keep up with the sales lines’ demands for an efficient and forward-looking logistics infrastructure. The three new logistics centres are to be set up in optimal geographic locations, i.e. locations that allow to optimise the transport routes for store deliveries as much as possible. According to analyses and calculations prepared by METRO GROUP, these geographically ideal locations are to be found in the regions around the cities of Velbert, Witten and Worms. In addition, the existing warehouse in Hamm is to be extended. The new logistics centres will in each case be larger than the existing locations and handle significantly larger volumes. In total, the three new locations and the logistics centre in Hamm will create jobs for around 1,300 employees. Overall, this corresponds roughly to the number of jobs at the existing locations affected by the changes. "The ideal geographic location of the new centres will allow for a greater centralisation of the sales lines’ goods flows across all assortments in the future", explains Jeroen Janssen Lok, Group Director Strategy Logistics Germany at METRO AG. "For the sales lines, the bundled and direct store delivery from the new locations will have a positive effect on the availability and freshness of the merchandise."

The operation of seven existing METRO LOGISTICS warehouses is to be gradually phased out during the period from mid-2017 to mid-2018. Concretely, the logistics services performed by the warehouses in Unna, Kamen, Essen, Frechen, Bingen, Gimbsheim and Gernsheim are to be gradually performed by the new locations. This reorganisation will affect a total of some 1,420 employees. It is planned to offer as many employees as possible a job at the new locations. A social plan is to be negotiated for those employees for whom such an offer is out of the question or who cannot reasonably be expected to accept such an offer in view of the distance, for example. In addition, also part of the volumes currently handled in Reichenbach, Altlandsberg and Bremen will in future be shifted to the new locations. The network optimisation and the shifting of logistics services to the new locations will have a distinctively positive effect on the transport services and process efficiency. Thanks to the reorganisation METRO GROUP will achieve annual savings potentials in the mid double-digit million euro range. METRO LOGISTICS is to continue operating as the logistics partner of the METRO GROUP sales lines.

METRO GROUP is one of the largest and most important international retailing companies. In the financial year 2013/14 it generated sales of around €63 billion. The company operates around 2,200 stores in 30 countries and has a headcount of around 250,000 employees. The performance of METRO GROUP is based on the strength of its sales brands that operate independently in their respective market segments: METRO/MAKRO Cash & Carry - the international leader in self-service wholesale - Media Markt and Saturn - the European market leader in consumer electronics retailing - Real hypermarkets and Galeria Kaufhof department stores.