Metro Group to consolidate its Makro Cash & Carry organization in Spain and Portugal in new central headquarters in Madrid; Jose Maria Cervera, country manager of Makro Spain, will assume general management of both countries

Cindy Allen

DUSSELDORF, Germany , April 19, 2012 (press release) – The Board of METRO GROUPand the Executive Committee of Metro Cash & Carrytoday announced a new organisational structure for Makro Cash & Carryboth in Spain and in Portugal. By 1 May 2012 both local head offices and its management will be integrated in a new central head quarters based in Madrid. José María Cervera, Country Manager of Makro Spain, will assume the general management of both countries. Large parts of the administrative functions of Makro Portugal will be moved to Makro Spain and integrated into the new organisation. The goal is to improve the competitiveness and to increase synergies between the two country organisations. At the same time, the Portuguese store in Aveiro will be closed down.

"In Portugal, we want to return to a solid, sustainable and future growth path for our wholesale business", says Frans Muller, CEO of Metro Cash & Carry."We firmly believe that the integration will lead to efficient processes, a leaner administration, the increase of buying synergies, bundling of expert know-how in one organisation and the reduction of costs of several million Euros. This step will make both countries more forceful prospects." Despite several countermeasures taken over the past years Makro Portugal did not reach performance targets. Additional pressure on the organization derives from an extremely difficult economic environment with a shrinking GDP real, a double-digit unemployment rate and a very high inflation rate.

The restructuring foresees that large parts of the administrative functions of Makro Portugal will be moved to Makro Spain and integrated into the Spanish organisation in order to streamline or eliminate overlapping structures. Furthermore the Makro store in Aveiro will be closed down, the Portuguese store network therewith reduced to 10. The establishment of the new organisational structure and the closure of the Aveiro store is associated with personnel restructuring: Until the end of 2012 the number of employees in Portugal will be reduced by around 150: about 90 of them at headquarters, further approximately 60 at the Aveiro store.

Elements of the turnaround concept

In addition to the structural and organisational changes, the core business will be rebuilt by means of increasing existing buying synergies between the two countries, a higher own brand share and a review of current range and space. One important cornerstone of the overall strategy to bring Makro Portugal back on the growth path is the introduction of the "Business Migration Model" (BMM) that was successfully introduced in Spain in 2010. The implementation of the BMM store structure will ensure better in-store customer service and boost employee motivation. The objective is to increase customer share of wallet, buying experience and operational excellence.

* All content is copyrighted by Industry Intelligence, or the original respective author or source. You may not recirculate, redistrubte or publish the analysis and presentation included in the service without Industry Intelligence's prior written consent. Please review our terms of use.