Makro Belgium will receive another 40 million euros from German parent company Metro, but that may well be the final lifeline. The Germans' patience with the loss-making Belgian branch is wearing thin: without a quick improvement the branch may be closed.
Deadline getting closer
Makro's six Belgian stores will be getting a new capital injection of 40 million euros, according to local website De Rijkste Belgen. Over the past few years, the German parent holding has been spending hundreds of millions on the chain: last year alone, Makro is said to have received 80 million euros.
Last year, CEO Vincent Nolf announced a new strategy for the ailing formula: Makro was to start targeting hobby cooks and organisations. It was the second change of plans in a short time: after restructurings in 2016, the chain was to focus more on non-food and small packagings, but now it is shifting back to food and bulk products.
Last summer, Nolf already admitted that the shareholders' patience was running out. Insiders say the CEO faced an ultimatum: without some improvement in 2019, closure would follow.
Consequences for Metro stores
"Unless the shareholders inject more capital, it could be over soon," Luc Buys from trade union BBTK said earlier this week in response to a national strike in Belgium. All six stores remained closed on that day: not only out of solidarity for the other strikers, but also to protest the fact that too many employees in the chain are there under temp contracts or as students. They also complain about high work pressure.
The German parent company keeps investing in Makro because of its sibling Metro, which targets businesses. The wholesale department is doing better, but it needs Makro's support (or rather: its economies of scale). "If Makro goes down, there will be consequences for Metro. Both chains buy products together and they also share supportive services," Nolf commented previously in Belgian newspaper De Tijd.