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Business strategies: The Carrefour group

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  1. Introduction
  2. The Profile of the Carrefour Group
    1. Background
    2. Key figures
    3. Signs of the Carrefour Group
    4. International Development and Geographic Locations
  3. Business strategies of Carrefour
    1. The evolving strategy of Carrefour
    2. The different forms of distribution
  4. Carrefour and internationalization
    1. Internationalization, a growth mode
    2. The choice of locations and different implementation strategies of the group
  5. Conclusion

The Carrefour Group is the leading European retail group, and is the second largest in the world after Wal-Mart. Although it is still poised as a leader, it continues to develop amid tough competition on European markets as well as the global markets, even as the demands of the consumers become more and more pronounced. It is indeed a very successful French company which is a common household name, and has influenced its economic and social environment for several decades, owing to a very specific mode of operation.

It would therefore be interesting to study the methods through which the Carrefour group has been able to achieve and maintain its position of the retailer of choice in the retail sector in France, its country of origin, as well as in the world.
Carrefour has implemented new concepts in business strategies, including the use of its various retail formats, and is inspired to relocate abroad, with a complex and offensive strategy.

Carrefour was created in 1959 by Michel Fournier in association with the Defforey brothers. The company opened its first supermarket in Annecy next year and invented a new concept by opening the first hypermarket in Sainte-Genevieve des Bois (with 2500m ², 12 cases and 400 parking spaces) in 1963. Carrefour entered the stock market in 1970 and began its operations abroad by opening the first hypermarket in 1973 in Spain under the brand Pryca, and one in Brazil in 1975, followed by Argentina and Taiwan in 1982 and 1989 respectively. Carrefour developed discount stores with the sign "Ed", from 1979 onwards.

This was bought by the French chain Euromarché Montlaur in 1991, and opened its first hypermarket in Greece and Portugal. The group then took root in Italy, Turkey and China, in 1993 and 1994 respectively. In 1996, Carrefour continued its expansion by setting up business in Thailand in Asia, Korea and Hong Kong.

From 1997 to 2000, the company opened hypermarkets in Singapore, Japan and Poland, and then acquired 85 hypermarkets in Brazil. In 2006, Carrefour expanded to Spain by acquiring six hypermarkets and service stations with Caprabo, and reached the thousand hypermarkets mark, operating worldwide under its brand.

In 2005, consolidated sales increased by 2.5%. The Group took the decision to stop operating under the Champion brand in Spain and Brazil. It also completed the acquisition of twelve hypermarkets in Poland from Ahold, acquired Aligros in Italy, Gima and Endien in Turkey, Chris Cash & Carry in Cyprus, the activities of the Rewe group discount stores, and 11 hypermarkets in France at Sonae Brazil.

Carrefour has also signed a Memorandum of Understanding with respect to the exchange of business in the Czech Republic and Slovakia against the assets of Tesco Taiwan. In France, the group's turnover in 2005 dropped by 0.4%. In Europe, sales rose by 3.6%, while in Latin America and Asia, sales rose by 7.5% and 12.6% respectively. The Turnover Taxes under banner of the Group amounted to 93.6 billion Euros. Carrefour opened supermarkets on nearly 1.5 million square meters (openings and acquisitions) in 2005, which was equivalent to the opening of nearly 1,400 outlets.

Tags : Latin America, Asia, The Turnover Taxes, Czech Republic, Slovakia, Carrefour, European retail group, Wal-Mart, Michel Fournier

[...] Carrefour supermarkets, are mainly grouped under the name of Champion, and have from 25 to 250 employees, depending on the store size. They contributed to 24% of group's turnover in 2005. Carrefour has a special interest in this distribution format, because it has a number of significant assets. Yes, it is a format that has a very good ability to adapt locally, despite its size, as is evidenced by its presence in towns, suburbs and rural areas. The supermarket also adapts its range of products to the local demand accurately. [...]

[...] Penetration strategies: alliances, acquisitions or development Carrefour is now the leading supermarket operator in Europe, and the acquisitions made in recent years have considerably strengthened its activities in the supermarket business. Its strategy is not to build a global brand but maintain the strong reputation of each brand in its home country, play on its strengths and the exchange of knowledge between individual countries. The Penetration strategy takes into account the saturation of markets in Europe. According to the Raffarin law, retailers are forced to buy or to launch takeover bids to acquire new stores. [...]

[...] The principle is simple: In a crisis following the oil shock, Carrefour is defending the purchasing power by creating fifty staples of non-branded food packaging never before developed. They are sold at a floor price, which nevertheless allowed for substantial profit margins. This idea was further developed during the next decade by Carrefour, which then branded its products, and thus added to its status as a distributor of the brand. This range now includes nearly 3000 Crossroads references, and other brands that are developed in areas of specific consumption (e.g. [...]

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