What strategies for international grocers in Asia?
Within a troubled health landscape in Asia, food retailers adopt very distinct strategies depending on their format. Costco, the U.S. cash & carry giant (sales of US$149.3 billion in 2019, up by 7.9%) pursues Chinese ambitions. A first store opening in the Minhang’s district of Shanghai in August 2019 recorded an average of 16,000 visitors per day last year. The firm has now completed acquisition of a second plot of 47,320 sq.m in the Kangqiao industrial zone (in Pudong, Shanghai). This US$128 million transaction was finalised by Pudong Warehouse Development Limited, a subsidiary of Costco, and the property developer Star River Group. Costco has not announced an opening date for this new warehouse store.
The German wholesaler Metro AG (turnover of US$29.5 billion in 2019, up by 3.8%), sold a majority stake in Chinese operations at the end of 2019. The firm has now moved focus to India where the retailer already operates 27 wholesale stores in 17 cities, with 5 new units planned in 2020. Metro AG sees a potential growth in both physical and online businesses as an expansion of the “Smart Kirana Program” in India.