Reliance Retail, which recently acquired Metro AG’s India wholesale business, will turn the stores into destination retail outlets catering to both trade and consumers, said a senior industry executive aware of the plans.
Metro sold only to business customers such as neighbourhood stores, hotels, restaurants, caterers and others with a business or goods and services tax (GST) licence as its German parent had to comply with India’s norms that only allow 100% foreign direct investment (FDI) in cash-and-carry or wholesale trade.
Once the acquisition by Reliance is approved by the government, as an Indian entity the new owner need not comply with such regulations. The deal is likely to be completed by March after all regulatory permissions, the executive said.
The stores will continue under the Metro brand for three years as per the deal terms.
Reliance Retail will sell the entire assortment of grocery, value fashion and electronics from these outlets, as well as onboard these stores on the JioMart shopping app. There will be both consumer and wholesale packs available at the outlets, the executive said. Business customers can avail of GST benefits, he said.
Reliance will also absorb the Metro India team and some of the stores will have cafes. However, Reliance is yet to decide whether the outlets will continue to sell non-vegetarian products as they do now, the executive said. The company didn’t respond to queries.
Reliance Retail Ventures, a subsidiary of Reliance Industries, last month signed definitive agreements to acquire all of Metro Cash & Carry India for ₹2,850 crore. Reliance Retail Ventures is also the holding company for Reliance Retail.
As part of the deal, Reliance got 31 large format stores in 21 cities as well as the real estate portfolio that includes six store-occupied properties, 3,500 employees and Metro’s 3 million B2B customers, of which a third are frequent buyers. Metro India generated sales of ₹7,700 crore in the fiscal year ended September 2022.