Leading global retailer Carrefour has put the difficulties of its merger with Promodès behind it, says the Institute of Grocery Distribution [IGD], and the company will now concentrate on its core retailing skills to secure market leadership.
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The research institute explained that the merger has created a “new” Carrefour group which is fundamentally different to the Carrefour of two years ago. The “old” Carrefour was an international hypermarket retailer with a European presence limited to France and Spain. The “new” Carrefour is a multi-format retailer (hypermarkets, supermarkets and discount stores) with a strong international presence and a leading position in its enlarged home market, Europe, which now accounts for 80% of its turnover.
Carrefour’s strategic priorities over the next decade are likely to be:
·Short term: Building market share in all markets whilst maximising returns on investment
·Medium term (two to four years): Consolidating the enlarged home market
·Long term (five to ten years): Confirming its position at the top of the global league
·Beyond ten years: Diversification
By 2010, IGD anticipates that Carrefour will be one of the few global retailers to have established a market presence in all global regions. However, it is likely that Carrefour’s future international expansion will follow a different path to previous years. This is because Carrefour is now entering its next stage of global development and of course, it is doing this with the considerable benefit of almost 30 years of international experience.
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By GlobalDataToday, Carrefour is the most international grocery retailer with operations in 31 countries across four continents. Most countries already generate a positive contribution for the group and Carrefour is therefore well placed to either invest in order to gain market share or weather macro-economic difficulties, for example right now in Argentina.
Future global growth is likely to rely heavily on both mergers and acquisitions and an increased rate of new store opening. A significant consequence of the Promodès merger is that the hypermarket format is no longer the main focus of Carrefour’s strategy. The group is actively pursuing the opportunity to develop its supermarket and discount business worldwide.
Anne Bordier, senior business analyst, said: “The complexity of the merger should not be underestimated, as the two companies had different cultures and working methods. The new group combines Carrefour’s historical know-how in the hypermarket format with Promodès’ expertise in the management of a complex group structure.
“Also, it is interesting to note that if Carrefour now sees Europe as its home market, this places it in a similar position to Wal-Mart. Both retailers can then be considered as having comparable domestic market positions and both achieve around 20% of their turnover outside their home markets.”
