The CEO of Carrefour, Georges Plassat, has insisted the measures the French giant is taking to improve sales mean the retailer “is back”.
Struggles with its price positioning and consumers turning away from hypermarkets have taken their toll on Europe’s largest retailer. As a result, the group has been slimming the business down in the last 12 months.
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It has also sold stakes in ventures in Indonesia and Greece, with local partners keeping hold of the Carrefour franchises, as well as offloading its stores in Colombia to Chilean retailer Cencosud. Carrefour has also sold its stake in its venture with Dubai-based group Majid Al Futtaim.
However, Carrefour appears to be moving in the right direction and, in its latest first-half figures last month, booked an increase in profits, boosted by a strong rebound in profitability at its domestic business.
Speaking at the World Retail Congress in Paris yesterday (7 October), Plassat said: “I am convinced that the measures we are taking today mean Carrefour is back. Our focus is on Europe, South America, China and Thailand.”
Plassat told attendees Europe was “still a popular market” for retailers, despite poor consumer sentiment and economies still struggling in the aftermath of the recession.
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By GlobalDataIn Europe, Plassat said Carrefour’s average revenue per capita is “still the highest in the world”. “We will get there,” he insisted.
Key emerging market economies have cooled in recent quarters, meaning FMCG companies are having to adapt to a more cautious local consumer. Plassat, however, was sanguine about the recent slowdown.
“In Brazil and Argentina, the future is underway. These countries are facing problems but we have to develop as best we can,” he said.
Plassat highlighted two trends in emerging markets that he said would create a US$18trn opportunity for retailers – urbanisation and the rise of the middle class. “Over the next 15 years consumers in emerging markets will migrate from the periphery of the global economy to its centre. By 2025 consumption in emerging markets will have more than doubled from 2010, jumping from $12trn to $30trn.”
Urbanisation and the rise of the middle class will, he said, “drive the growth of modern retail”.
In his speech on day one of the World Retail Congress, Plassat insisted the hypermarket format was “not dead”.
He told conference attendees Carrefour is “working on new tools”, including digital and e-commerce but insisted “clicks and mortar are the future” and said e-commerce alone was not enough.
In summary, he insisted: “Carrefour is back. We still have a long way to go. We are smaller but we are still there.
