Metro unveils expansion plan

Against the backdrop of an economic slowdown, German wholesale retailer Metro Cash & Carry Tuesday unveiled its China expansion plan for this year, vowing to open at least 13 new stores in China.

Metro, the world's third biggest retailer by sales behind France's Carrefour and US industry leader Wal-Mart Stores Inc, said its China sales hit 1.89 billion euros ($2.46 billion) last year, an increase of 23 percent over a year earlier.

The German firm's China profit figure is not available, but Metro China's president Uwe Hoelzer told the Global Times in Shanghai Tuesday that the company's profit reached a "record high" for 2012.

"Last year, we opened 12 new stores, and for this year, we aim to open at least 13 stores in China," Hoelzer said, noting that in the 16 years since the company first set foot in China, its average expansion speed has been 3.5 stores per year.

The world's second largest economy posted an annual GDP growth decline of 7.8 percent in 2012, the slowest pace since 1999. And policymakers set this year's economic growth target at 7.5 percent.

But Hoelzer said that compared to where he comes from - Europe, where the economy is "really slowing down" - the 7 to 8 percent economic growth in China, combined with its population of 1.3 billion, means the country is a huge market with many opportunities and "so much room to develop."

"Metro's business model is mainly to target corporate clients with very competitive prices. The market has big potential in China," Yan Qiang of Adfaith Management Consulting, told the Global Times.

Metro's peers are also working on expanding, albeit in different ways. Wal-Mart, which is scheduled to close three stores in China this month, has also announced that it is aiming to invest nearly 500 million yuan ($79.8 million) to renovate 50 stores in the country and open 30 new ones, mostly in smaller cities, this year.

Tang Jianian, head of Carrefour's operations in Greater China, said earlier this year that Carrefour would not slow its pace of new store openings in the country, even though six of its stores had closed down over the past three years.

"Carrefour and Wal-Mart, which focus totally on retail in China, need to choose good store locations. Considering the increasing rent, the business pressure is obvious," Yan said.

Metro does not just serve individual consumers, according to Hoelzer, but also provides corporate gifts and supplies food for restaurants, hotels and cafeterias.

Metro usually selects suburban areas for new stores, which makes the rent less expensive, Yan noted. The food business also helps protect Metro from competition with booming e-commerce, which can't deliver large quantities of fresh food in a timely manner, he said.