In an industry where minimizing risk often means leaning heavily on consignment, Metro Retail Stores Group does the opposite.
While many large retailers opt to have suppliers place goods on consignment—allowing them to sell without owning the inventory—Metro takes on that risk directly. Roughly 70% of its merchandise is bought outright, one of the highest in the Philippine retail sector.
This approach bucks the trend, especially for a company headquartered outside Metro Manila. Frank Gaisano, former Chairman of Metro Retail Stores Group, Inc. (MRSGI), attributes this model to both necessity and strategy. “Suppliers are in Manila,” he noted, “so it’s hard for them to manage stores in the provinces. That’s why we take control of inventory ourselves.”
Taking on that much inventory risk, however, requires sharp planning and deep operational discipline. Metro meets this challenge with heavy investments in technology. Their system tracks stock-keeping units (SKUs) down to granular levels, enabling fast replenishment and precise inventory turnover management.
“We probably have the best-in-class IT software,” Gaisano shared. The system allows Metro to monitor movement, sales velocity, and reordering needs across thousands of SKUs—from imported goods to fast-moving consumer products.
Outright buying also gives Metro more control over pricing and product assortment. Unlike the consignment model—where space and pricing may be dictated by suppliers—Metro can fine-tune offerings based on customer demand, location, and market behavior. It’s a strategy that favors agility over convenience.
This model may seem risky on paper, but it has allowed Metro to scale efficiently, especially in regions like the Visayas where it holds a dominant presence. With better margins, faster reaction times, and tighter control over store offerings, Metro’s inventory strategy stands out in a crowded retail landscape.
“We plan well, and then we execute well,” Gaisano said. That philosophy—combined with smart technology—has turned inventory from a liability into a competitive edge.
