Makro UK is part of the German-based Metro Group, one of the world’s largest and most international retailing companies, with group sales that reached €31.7 billion (£25.1bn) in 2007.

Metro operates across 600 stores in 29 countries worldwide.

Metro Cash & Carry is the largest of its type, comprising Real Hypermarkets, Media Market and Saturn - a European market leader in consumer electronics retailing - and Galeria Kaufhof department stores.

The group’s sales rose by 7.1 per cent in the first half of 2008, and its share of sales outside Germany now exceeds 60 per cent of total turnover.

When did Makro first come to the UK?

We opened our first cash and carry in the UK in 1971 and today have a 33-store network, employing 6,500 people. Branches are located in most of the UK’s major cities, from Aberdeen in the North East, to Exeter in the South West. Makro is a ‘big box’ wholesaler - the average size of our stores is 9,000sqm.

How would you define your customer base?

We came up with a word to define our target market - HoReCa - which describes hotels, restaurants and caterers. The UK is the biggest market for this category in Europe and our mission is to be its leading supplier.

Our other target is convenience retailers, for although this market is in decline, we still believe we can increase our share of it.

Our customers are professional businesses and we are not open to the general public.

Where does fresh produce fit into the equation?

Over the last three and a half years we have completely rebuilt our fruit and vegetable business to focus on delivering the requirements of our HoReCa customers, increasing our offer and sourcing high-quality produce.

To what would you attribute this growth?

Simply by listening to what our HoReCa customers want and delivering it.

First, there is the range we can offer. We now stock a full range of wholesale cases/cartons, just as customers would find in a wholesale market. Today, 170 lines out of our total range are wholesale packs.

Second, there is price. Four years ago, our prices were not competitive enough. Now we are competitive with the wholesale markets, delivered wholesalers and other cash and carries.

Availability is also a key aspect and this has been a major focus across the business. In 2007, a new department was set up in our head office to work on this. Availability is measured in all stores throughout the day and our company policy is that no gaps are tolerated.

A key part of the proposition is, of course, customer service. We conducted a major recruitment drive across our stores and every produce department now has a fruit and vegetable specialist who comes with either a wholesale or retail background.

Each store also has a customer consultant recruited from a catering background. Their purpose is to build one-to-one relationships with catering customers. They also visit customer premises and we have recently begun a campaign where they spend a week working in customer restaurants, cafes and pubs. The aim is to give them an intimate understanding of our customers’ businesses.

Another recent initiative, currently being tried by our flagship store in Charlton, is opening at 5am, which allows customers to purchase and return to their premises before opening. If this is successful, we will roll it out to all stores.

How do you source product?

One of Metro’s aims is to form a close working relationship with suppliers. Our produce operation uses this principle.

Our buying office and distribution platform are based on the same site as our biggest supplier, MBMG - formed when MBM Produce acquired FW Gedney - at Bicker near Boston, Lincolnshire. The supplier is a major potato and brassica grower and within a mile of our warehouse it grows 10 different crops for us - namely cauliflower, broccoli, Brussels sprouts, potatoes, onions, red and white onions, Savoy and Primo cabbage, and pumpkins.

We can have cauliflower cut in the field at 6am, in a warehouse by 8am, packed and loaded onto a truck by 10am and in one of our stores by lunchtime - field to fork in six hours, which is probably the fastest distribution in the produce industry. We also have a pre-packing factory next door to our warehouse for crops not packed in the field.

This gives us an advantage in freshness, taking a whole distribution link out of the supply chain, and reducing distribution costs and our carbon footprint.

Other key suppliers of products ranging from root crops, mushrooms, and top fruit to citrus and melons are close by.

But not everything can come from Lincolnshire. Where are the other links to ensure there is the range and continuity?

Naturally, we have a strong relationship with our colleagues in Germany, and every day trucks arrive from our Metro Produce Platform in Duisberg, near Düsseldorf.

For most importers, Germany tends to be a niche market, but we use our buying power to provide a range of between 25 and 30 lines according to season. Current examples are carrots, courgettes, fennel, rocket, radicchio and mushrooms.

We also have access to every product stocked at Duisberg out of a total of 750, which gives us greater flexibility. If we have a special customer order for something we do not stock, we can order as little as a single case.

We have also started to pool volumes with Metro cash and carries across western and eastern Europe. For example, every October, Metro buyers across Europe visit Spain and negotiate with citrus growers in Valencia. It means we can guarantee big volumes to suppliers and negotiate from a position of considerable strength. Total group purchases last year were more than 2,200 trucks.

We import about 30 lines directly from one of the Netherlands’ biggest co-operatives, which are mainly salads and fruit such as lemons, pineapples and limes, which are shipped into Rotterdam.

We also have close links with France, where Metro is one of the biggest produce wholesalers, and we trade with two companies with which we have built up strong relationships over many years. One is based in Rungis, which provides a very wide range and is particularly useful for exotics. Thanks to this supply route we now have a large number of French restaurants, particularly in London, regularly buying products from us that they cannot find elsewhere.

With such a large range of products coming into a single distribution depot, how do you approach quality control?

We employ a full-time quality controller who has 20 years’ experience, having worked for Geest for many years. He has a close working relationship with all suppliers and inspects every single batch delivered each day against a quality criteria. Every supplier also receives written feedback for each consignment.

I am fortunate as I can see all of my products on site every morning, which is not the case for many retailers, whose executives are usually based at a head office many miles from their distribution centres.

What is your attitude towards the various quality assurance schemes that are in place?

All our suppliers believe in best practice and belong to GlobalGAP, the British Retail Consortium or Assured Produce.

In every category we aim to buy the best available, and our suppliers share this philosophy. Each product also has a written specification and if the quality is not reached, the product is rejected.

At the same time, you are operating in a highly competitive market that is dominated by powerful retailers and a handful of large delivered national wholesalers - so how can you establish a point of difference?

We have worked hard over the past four years to achieve this. Makro is the only outlet in the UK to stock a full range of wholesale cases and additionally a full range of retail pack sizes. There are different dynamics to our customer base that drive us to stock a unique range of pack sizes alongside the standard wholesale case/carton.

Many of our catering customers are small independent caterers who often lack storage space in their kitchens. They also worry about wastage levels. To satisfy their needs, we offer small units alongside wholesale standard packs.

Could you give some examples of these?

We have baking potatoes and washed white potatoes in 7.5kg sacks, bagged prepared salads in 500g packs, mixed speciality lettuce in cases of six, mixed peppers in cases of 12, tomatoes in a 2kg pack and mushrooms in 1.36kg boxes.

We also have cooking onions and mild Spanish types in sacks of 5kg and 10kg, exotic vegetables in packs of 500g, and carrots in 5kg. Examples of fruit are lemons in 2.5kg boxes and apples in packs of 24.

Surely it is not just a question of providing suitable sized packaging?

Certainly not. These products are underpinned by a strong belief in branding and ensuring that the crops are always consistent in size, as well as external and internal quality.

Makro also has the advantage of being part of an international company, so we can source specialist niche products from all over the world and use the expert knowledge and advice of our specialists in other countries to help our customers in the UK.

Can you give examples of what you mean?

Independent wholesalers, in particular, do not have good access to supply bases that give their customers continuity of branding. One day a product may come from grower A and the next it might come from grower B.

We have developed consistent and attractive branding on a number of products. Our salad potatoes are not in an anonymous box - they are Baby Pearl salad potatoes for 365 days of the year. It’s the same with our baking potatoes, which are Bakers’ Banquet, and Maris Piper in 25kg packs are Chippies’ Choice.

We are the only major receiver of Bonduelle bagged salads and we only stock Fyffes bananas.

The strategy is to build trust so customers will keep coming back.

With niche products, we regularly import produce from all over the world with advice from Metro internationally, including the Netherlands, France, Spain and Italy. If a customer needs a specialist product from outside the UK, we can order small quantities to suit their needs using the help and support of our colleagues overseas.

You also mentioned consistent sizing?

We also differentiate our technical specification on certain key products.

Tomatoes are always in the 57-67mm size range. Cooking onions are always 60-80mm, which makes preparation easier for cooks and ensures quality is maintained. Cucumbers are a minimum of 400-500g and sometimes 500-600g. Apples are always 70-75mm. Our competitors tend to use fruit of less than 70mm.

Finally, the other important aspect of our customer proposition is that caterers buy all their requirements under one roof. Meat, fresh fish, alcoholic drinks, groceries and even catering equipment, such as refrigeration, cutlery, uniforms and stationery, can all be bought at Makro.

As a result of this, Makro has one of the fastest rates of sales growth of any produce business in the UK.

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