Carrefour and Walmart: Positioned to succeed through convenience, diversity and customer service
- Relevant history and growth
- Methodology for financial analysis
- Debt management ratios
- IFRS and US GAAP
- Financial statement presentation
The Food and Marketing institute (FMI) estimates that the American population spends over $5.6 billion a year on groceries and that the average store carries over 40,000 products (http://www.fmi.org/facts_figs/?fuseaction=superfact). With each household visiting the grocery store twice a week, it is increasingly important that the stores differentiate themselves to attract more customers and increase their loyalty. By applying economies of scale, outstanding customer experiences and an efficient management of inventory, Wal-Mart and Carrefour have risen to the top of their markets by providing the right product, at the right time and at the right price. The modern consumer does not lack options. There is little difference from one brand store to the next and customer choice truly becomes a personal preference. This is reason enough for superstores around the world to create the perfect shopping environment where comfort and convenience meet the right set of circumstances that make a particular chain competitive in their market.
This paper will focus on the overviews and financials of two of these retailers. France's Carrefour and the American Wal-Mart. These two companies dominate the industry of the ?hypermarket? in their respective geographies?Carrefour is the number 1 retailer in Europe and number 2 in the world while Wal-Mart is the largest supermarket by sales volume in the United States (Ellickson, 2011). They are not necessarily competitors in their main revenue generating markets rather have recently started to share the same demographics in some of their international locations. We will therefore show some of their similarities and differences that are key to their success. In addition, by extrapolating data from their respective 2010 year end reports, we will calculate standard financial ratios to illustrate their financial health and their likelihood for continued growth given the current economic situation around the world.
[...] They are also currently working on their brand image so that it becomes a truly important part of their customer's life Transformation By transforming the relationships between suppliers and customers and enhancing the relationships across all areas of the organization, Carrefour will be able to benefit from in-house knowledge to not only create anextraordinary customer experience but also an outstanding employment experience. In their words, well as being the preferred retailer, we want to be the preferred employer? (http://www.carrefour.com/cdc/group/our- strategy/) 3. [...]
[...] At the same time, it acquires 6 regional chains of stores in Brazil through which it adds 85 local supermarkets to its portfolio 2000 Opens first Hypermarket in Japan 2003 Acquires the group Hyparlo in Italy 2006 Acquires Ahold company to become the 2nd largest player in the grocery retail market worldwide 2007 Begins efforts to create a singular brand representative of the entire portfolio and illustrative of its corporate culture and values 2008 Only in Stores opened under the Carrefour umbrella of brands around the world An Interesting thing to note of Carrefour's internationalization and growth is that it goes against what most people would agree to be sound strategy by entering markets that were not the most developed or stable ones. [...]
[...] Overall Growth In spite of the economic slowdown all over the world and especially in the USA as Walmart is concerned, it managed to continue its steady growth positively in every aspect illustrated by its finance reports. The fact that it is the preferred retailer for discount goods, and it offers customers all over the United States essential products at the most competitive pricing, keeps the organization relatively protected from financial slowdowns. On the other hand, Carrefour suffered a slight declined in sales from 2008 to 2009, which they recovered the following year (see specifics in Exhibit E). [...]