Metro Bulgaria goes the franchise route, by opening 800 small shops by 2027

By 2027, Metro Bulgaria plans to invest 4 million euros for the opening of 800 small stores in Bulgaria as part of the "My Store" franchise project. So far, 9 such shops already exist in different parts of the country, and next week, the tenth one will open doors near Plovdiv. Jean Cautain, CEO of Metro Bulgaria, announced this to Economic.bg.

It is important for us to return to our roots and remain a partner of independent businesses," he emphasized at a special event on the occasion of the 25th anniversary of METRO’s debut in the Bulgarian market.

800 My Store locations by 2027

The "My Store" franchise project aims to support small, often family-owned businesses in different regions of the country that are succumbing to the pressure of larger competitors. The opening of 50 such shops is planned this year. Cautain, however, says the investment is not just about changing the look of neighborhood stores but aims to change the entire concept of doing business.

Owners of such stores included in the Metro program receive financial support for vision and identity, special shopping conditions from Metro, 360-degree marketing support, market knowledge and information. They also retain autonomy and continue to make decisions about their business. The shop owners have to buy only about 30% of the products offered by Metro.

We do not influence or determine the prices at which they decide to offer our products. We provide them with a margin of more than 20% so they can match strength with the competition,” emphasized Cautain.

Some of the 9 franchise shops in existence saw an increase in revenue of over 50%. Some are located in small towns like Velingrad and Svoge. The ambition of Bulgaria’s largest wholesaler is to expand these shops to 800 throughout the country by 2027, to become the largest franchise network in the country.

"Back to the Roots"

The franchise concept comes from the Metro Bulgaria strategy (renewed 2 years ago) to continue strengthening its position as the largest wholesaler in Bulgaria. The company entered the country 25 years ago, offering a large assortment of products for the HoReCa sector. Over the years, its competitive prices have also benefited end users.

We’ve become a hybrid, but we decided to go back to our roots and strengthen our advantage even more,” says Cautain.

For the past year, Metro recorded sales of over 550 million euros, which is an increase of 14% compared to 2022. The company does not plan to open new traditional store locations. It already has a presence in nine of Bulgaria’s major cities with 11 stores, 9 of which have a multi-channel wholesale model.

Stable prices and a wide assortment

Metro’s goal is to remain attractive both to retailers and the HoReCa sector and to end consumers. Elena Tsenova, Offer Management Director, commented that Metro will continue to provide its customers with the widest range of products - with the main emphasis on price stability.

The pricing model that we offer is unique in its kind," stated Tsenova.

This is because the company offers 3 levels of discounts based on the quantities purchased. For different products, the discount can reach up to 40-50%. All prices are visible on the shelves, so end customers can benefit from them, too, not just the retailers. The "Get more, save more" program includes over 6,000 products from the company's entire portfolio of 20,000 products.

Their other pricing program "Always profitable" is oriented towards HoReCa clients, as the company offers consistently low unit prices of basic products.

Metro will continue to invest in the delivery business with the so-called FSD service (Food Service Delivery). The company is the only wholesaler to offer this service in Bulgaria, already available in 10 locations. In 2023, it served over 5,000 customers. Three times more investments to that end are planned for the coming years, and the reconstruction of the platforms in Varna and Burgas is already underway.

The company has five of its own brands, covering 5,500 items - food and non-food products. For 2023, their share of the sales turnover was about 16%, and the goal is to reach 19% this year. In the future, Metro aims for a third of sales to come from its own brands of products. That’s why there are ongoing investments in the development of additional products.

We create them to meet the specific needs of our customers", comments Tsenova.

Investments in personnel and ESG goals

In order for Metro to continue to be a leading wholesaler and fulfill its ambitious goals, the company will naturally also continue to invest in its personnel. At the moment, 2,000 employees work in Metro. The company's sales team, oriented towards the HoReCa sector, will be increased to 150 people this year.

Maria Angelova, People and Culture Lead, commented that the company counts as its partners six schools in the country offering dual education programs. This year, about 35 students are doing practical internships in the company.

Three of the graduates are now heads of departments."

"Together we can" is the new work brand that aims to prove that with joint efforts anything can be achieved. In addition, Metro offers a package of online trainings, participation in international programs and communities and other such initiatives that continuously develop the potential of its employees.

With regard to sustainable development, over the years Metro has invested 7.5 million euros in measures to reduce emissions. In addition, the company cooperates and donates suitable products to the Bulgarian Food Bank, thus reducing its food waste.

Translated by Tzvetozar Vincent Iolov