Makro, the leader in Spain in wholesale food distribution (Metro group), has chosen El Prat de Llobregat (Barcelona) to start its new business strategy, with last kilometer distribution logistics centers that directly serve the hotelier in less than 24 hours. Opened a year ago and with an initial investment of more than 15 million euros, the platform is now fully operational. His CEO, David Martínez Fontano (León, 1971), affirms that Catalonia is the test bench for taking this model to the rest of Spain.

Why have you chosen Barcelona to install the new last kilometer distribution center?

First of all, due to the enormous potential of the market in Catalonia. Makro belongs to the German multinational Metro, present in more than 20 countries, and some of these markets are smaller than Catalonia, because domestic consumption in hotels must be added that which comes from tourism. Therefore, it is a large market. Secondly, Makro has historically been linked to Barcelona. We set up our first stores here in the 1970s, and now we are in a new phase as a company.

How is this new stage?

We are clear that our growth will not come from opening more cash and carry (self-service wholesale stores). Some of us will open, but our growth will mainly come from what we call Food Service Delivery, delivery service to hotels. This means that the hotelier either calls you, or places the order online, or receives the merchandise.

Is this what they will dedicate the new center of Barcelona to?

Yes. In Spain there are three regions with great potential for our company, which are the Canary Islands, Madrid and Barcelona. The new platform must be modern and large enough, with capacity and access and respecting the cold chain, something very important. When we do it perfectly in Catalonia, and we have a long way to go, we will extend this model to other parts of Spain.

Why have you opted for customer delivery? Is it increasingly difficult for the hotelier to go to the store?

Our customers tell us that it is very difficult for them to have to go to the store to buy the merchandise, and we make it easier for them if we deliver it to their business. In Spain, and particularly in Barcelona, ??there are many small catering establishments. This makes the variety of restaurants enormous. But what happens to the small hotel business? That it has few staff and they have little availability to travel to buy food. And that’s why they don’t go to the store so much. The life of a hotelier is very hard and we want to make it easier for you.

What kind of jobs will be created with this new logistics center? What profiles do you need?

We need three different types of employees: carriers, warehouse staff, and salespeople. We want to triple staff because it is a type of activity that cannot be excessively automated. Today we have the capacity to manage around 1,000 orders a day and we want to reach 3,000 orders.

Is the future of wholesale distribution then delivery?

Not just delivery. The best customer is the one who buys from us in both channels and when he has time he goes to the store because he likes to see the product and talk to the staff, and when he doesn’t have time we serve him. We have analyzed it and one does not cannibalize the other, but rather complements it. In fact, customers who buy from us on all channels, who go to the store from time to time and also use our online marketplace, buy from us thirteen times more than a customer who only goes to one channel.

The hospitality and food distribution business has been at the epicenter of the latest crises. First the pandemic, with the closure of bars and restaurants, and then the war in Ukraine, the shortage of some products such as sunflower oil at the beginning and then inflation. How have they lived through all this?

The last three years have been very hard, but it helped us focus even more on what we really needed to have. During the restrictions on the hospitality industry, we made a very brave decision, for which I feel responsible and proud, which was to maintain the entire sales force of the commercial teams. Instead of telling them that they couldn’t work because the hotel business was closed, we told them that they had to meet with the hoteliers, even if it was through Teams, or whatever, to make a plan for how to reopen. The restaurateurs really appreciated that we were by their side. We put at your disposal an app for them to deliver at home without having to depend on other delivery platforms.

And then?

That we have won quota, clearly. Last year the company in Spain grew by 33%, to 1,461 million euros, above the market. And this year we are also gaining share, we are seeing it every month. A new purchasing modality has also helped us, with the Makro Plus program, in which we reach agreements with customers. They agree to buy a certain volume from Makro and we give them credit and better prices.

And as for war and inflation?

What began as a concern, because there were supply problems for products such as oil, was really the least of the problems. The biggest problem was the price increase. All the suppliers came to us raising rates every day: either you accept them or they do not assure you of the supply, with which we had to accept them as the entire sector had to accept them. The innkeeper could not accept such a price increase. So we have had to change our sales policy.

As?

We have minimized the offers. In addition, we cannot be changing prices for the client every two by three. So this first quarter of the year, from January to March, which has been very hard in terms of inflation, we have guaranteed a stable price for more than 2,000 items, while our manufacturer was raising the purchase price. This has reduced our margins.

Are food prices moderating?

Yes. Be careful, we don’t see deflation either, except in some commodities, whose price is already cheaper than the previous year, as can happen in sunflower oil, although not in olive oil. In the rest there are still increases, but they are beginning to be more reasonable.

How is consumption evolving?

It is difficult to predict, but we believe that this summer is going to be very good. However, next year’s growth will be less than this year’s. We believe that in 2024 the rebound effect of the pandemic will no longer be there and, furthermore, we all see that going out of the house is becoming expensive. Hoteliers are also adapting to this environment. In order not to raise prices so much, sometimes they reduce the quantities. We are also seeing exponential growth in our own brand in the wholesale sector. And there is a reduction in premium items. If before there was a salad with prawns, now it has less prawns and more avocado. The positive is that a good out-of-home customer experience is still being offered at a reasonable price. The prices that hoteliers apply to the end customer are rising less than the prices of food that have been in the supermarket.