Arvind Mediratta: The Brain Behind METRO’s Meteoric Rise In India

Weeks of brainstorming session with his team impressed on Mediratta that a two-pronged strategy was required. Firstly, radical changes had to be introduced on the operational front. Secondly, a new ethos of ‘People First’ strategy had to be adopted intertwined with the company’s ‘Purpose’. While the former entailed restructuring of METRO India’s operations, the latter called for an approach that focused on leadership and work culture changes across the organization. Mediratta knew he had a colossal task at hand.

Just like its European operations, METRO had initially introduced the big-box format stores which were almost a lakh square feet in size- stores nearly twice the size of a football field! The dynamics of India operation and the cost and real estate challenges required reimagining the store formats. Mediratta pushed his team for innovation w.r.t store size to reduce the cost as well as the payback period to a couple of years from what was historically over a decade. This would also help optimize capex and operating expenses, while allowing more room for expansion.

Mediratta’s shift to capex light expansion proved impressive. New stores with a fresh research of a revised area, scaled down to 50,000 sq feet and 40000 sq feet, were rolled out; and they broke even within two to three years of their launch. METRO introduced its first small format store, sized 24000 sq. feet, at Tumakuru in October 2020, amidst the pandemic, and the store broke even within a year of operation! Mediratta’s bet on reimagining the business operation had hit bulls eye.

At the same time, Mediratta focused on digitalizing METRO's business to provide a unique omni-channel shopping experience to its customers. But he did not stop at that; he went a step further to help digitalizing businesses of its customers- small retailers, kiranas and the small hotels and resturants. In an article to Economic Times, Mediratta had expressed that METRO’s mission is to make kiranas, a key customer of the wholesaler, more profitable. To make it a reality, Mediratta called his team to brainstorm to discuss company’s approach for its the kirana customers to make them more successful. Mediratta knew Kiranas needed patronage; he decided to be the Bain and McKinsey to guide them on the techniques of modern retail. In order to transform small businesses and allow them to leverage technology for their operations, METRO India started to work on a new strategy and the concept of ‘Smart Kirana Program’ was conceptualized in 2018. As part of the modernization effort, the traditional small format store were transformed to new open store format for customers to walk in and experience the store, much like a modern trade store. The move was a masterstroke! The kirana segment began to thrive, and the program saw 40-50% increase in revenues and improved cash flows for them.

After helping kiranas on the ‘demand’ side, Mediratta went a step further to plug their supply challenges. His mission has been to transform METRO from a conventional brick and mortar company to an omnichannel player. Hence, in April 2020, an e-commerce app was rolled out to revolutionize the interaction between METRO and its kirana and trader customers. By leveraging digital and state-of-the-art solutions, kiranas now had access to range of product in just a few clicks. The app’s phenomenal 6x growth within two years of its launch is testimony to the masterstroke introduced by Mediratta.

The move to a cost-effective store format, cost optimization, focus on income development, digitalization of business and that of its customers, have all yielded overwhelmingly positive results cementing Mediratta's reputation as a ‘transformation specialist’

In addition to operational changes, Mediratta pushed for a cultural transformation. A ‘People First approach’ with a focus on meritocracy and ownership was rolled out. Mediratta has often been quoted as saying “You must always play to win”; hence he pushed for a winning & performance culture, and to this end, he accentuated a performance linked rewards program to encourage entrepreneurship in the workplace. Furthermore, he pushed for more inclusivity and diversity in leadership roles and senior management positions, inducting many women leaders in critical functions right from the board room to channel heads, marketing and Human Resource, and elevated women leaders as the captains of stores to spearhead operations.

The strong work culture was evident when the global pandemic caught everyone off guard. As an essential provider, METRO stores remained opened, and Mediratta knew safety and security of workforce as well as customer required precedence. All possible support were provided to ensure employees and their families remained physically and mentally safe; Employee health and safety remained a top priority. The mandate was clear from Mediratta- People are our biggest strength! Not a single METRO employee was laid off nor salary cuts were implemented during the pandemic phase. Instead, salary advances were rolled out for emergency care and insurance coverage doubled for COVID-19 treatment. Mediratta firmly believes and is quoted as saying- “If you take care of employees, they will take care of your business”.

But his ‘People first approach’ embraces not just thousands of METRO’s workers, but also encompasses millions of MSMEs, small traders, kirana customers associated with the company, who were equally vulnerable during the pandemic. Mediratta campaigned hard with government administration for recognizing kiranas, small retailers and the retail workforce as ‘frontline workers’ and prioritize their vaccinations in the phase one.

The People First strategy paid off immensely with METRO India being recognized by Great Place To Work (GPTW) Institute as one of India’s Top Best 25 Companies To Work For in 2021! Mediratta has always stressed on the fact- “Retail is not a Me business; it is a We business!”, and he knew the resilient ‘We’ (workforce) of METRO will steer the brand towards a profitable growth ?in the country.

?METRO has come a long way since it first set up its shop in the country. Its transformation story from a brick-and-mortar company to an omni-channel B2B player would be unimaginable without Arvind Mediratta. But Mediratta believes- The best is yet to come for METRO.
?