In the first of this year's regular updates on the world's top retailers, we look at recent developments at Carrefour, Tesco, Metro and Walmart. We see how online and digital strategies are becoming more important, and how they are adapting to changing conditions in various markets around the world.
Carrefour embarking on second phase of plan to deliver better profits
- Carrefour revealed solid full year results in March, with a 0.9% year-on-year increase in sales. An improved performance in France, where Carrefour gained momentum towards the second half, resulted in sales growth of 0.5%. Challenging economic conditions dampened sales in Europe (-3.1%) but performance was more robust in emerging markets (sales in Latin America +4.6%, Asia +0.5%)
- We spent time in-store at Carrefour, where we saw a clear evolution in its hypermarket strategy and a step-change in its approach to communication around pricing. These adaptations will strengthen the retailer's position in the increasingly price-oriented French market. On Thursday 27 March, Carrefour announced changes at its French business, which include a reorganisation of the hypermarket division and major management moves
- Carrefour is embarking upon the second phase of a plan to deliver better profits and better results with confidence. Focusing on its multichannel operations in France will continue to be a priority and its improved performance is a promising start, and realising the opportunities in emerging markets will support growth. As Carrefour begins to deliver operational changes, it is is already looking ahead to the third, development stage of its strategy
- Carrefour continues to streamline operations and focus on core markets. It announced its latest market exit in November, leaving Indonesia and selling its majority stake to local partner CT Corp. In Brazil, it has suspended e-commerce operations to continue the restructuring plan in place there. In southern Europe, Carrefour reaffirmed the importance of Italy denying rumours that the business was up for sale and appointing a new head of Italian operations as of April 2013. It has also been testing a hybrid hypermarket/cash & carry format called, Supeco, in Spain
Tesco strengthens in home market
- In the UK, Tesco announced the acquisition of restaurant group Giraffe. This follows on from investment in businesses such as Harris + Hoole, Euphorium and blinkbox, and is the latest in a series of acquisitions designed to help Tesco develop revenue streams beyond its core business and make its larger stores into more attractive retail destinations
- A major development in the first quarter of this year has been the launch of the coupon-at-till Price Promise scheme in the UK. The system refunds the difference to shoppers if products could have been bought for less at its main rivals. Significantly, the scheme covers both branded and private label products, which should make it very attractive to value conscious shoppers
- Multichannel developments continue apace in various markets. In the UK, Tesco has opened its fifth dark store, building home delivery capacity, and is using virtual reality technology for category planning. An online shopping platform in China is set to launch in the first half. In Thailand, Tesco Lotus has unveiled its first smartphone and social media app
- Management changes have been a feature in recent months. In the UK, Tesco created a new position for a managing director to oversee operations in London. Andrew Yaxley takes on responsibility for shaping the strategy for all formats in the London area. Further afield, new CEOs are to take office in South Korea and Malaysia
Metro - cautious but optimistic
- Metro delivered sales growth of 1.2% for the full year 2012, with a 0.6% increase in Germany and international sales up 1.6%. Disposals - such as that of Makro in the UK - affected results in some markets. Group chief executive Olaf Koch is optimistic about the outlook for 2013, while sounding a note of caution about the impact of the economic climate
- In a major management reshuffle, the CEO of Metro Cash & Carry, Frans Muller, is leaving the business. His role will be taken over by Olaf Koch, highlighting cash & carry's strategic importance as the group's largest and most valuable division
- In Germany, Metro's hypermarket division, Real, has merged the transactional and corporate websites in a move which it expects to drive traffic to the transactional site and accelerate its development. Metro is also one of three German retailers who are reportedly considering launching a mobile payment system, via smartphone. Elsewhere, Dutch wholesale subsidiary Makro also launched an online store
- Metro is not standing still and continues to expand or adapt its operations on a market-by-market basis. It is divesting the Real hypermarket business in eastern Europe to France's Auchan; this includes stores in Poland, Romania, Russia and Ukraine. In India and Russia, it intends to open smaller, more compact stores, while the number of franchise stores in Romania is set to double
Walmart's progress in e-commerce continues
- Walmart's full year results, for the year to 31 January 2013, revealed consolidated net sales growth of 5% and an operating income increase of 4.7%. The international business remains the main growth engine, but the rate of growth has slowed in the last year, reflecting decisions made about expansion in Brazil, Mexico and China. In the US, total sales were up 3.9% and Walmart continued to invest in price, smaller format development and multichannel operations
- One of the highlights of Walmart's past year has been the progress made in e-commerce; it is now among the innovators in the sector. Initiatives such as such as ‘store connect’, ‘Polaris search’ and more recently, the testing of ‘scan and go’ are helping the retailer deliver on its goal of creating a seamless shopping experience
- In the UK, Asda chief operating officer Judith McKenna is taking up a new role at Walmart International as executive vice president, strategy and international development. She will lead several areas including real estate strategy, M&A and integration, and she will also work closely with Walmart's Leverage and Global eCommerce teams, reporting directly to Doug McMillon, CEO and president of Walmart International
- In another key region - Africa - Walmart is seeking to grow its presence in a number of markets. This will include those in which Massmart is already operating, and the group will also look to enter Angola and Kenya during the fiscal year ending January 2014
For more insight...
Keep up to date with our global retailing trends page, which brings together all the latest news, research, store visits and special analysis from around the world. Click on the relevant month for our previous updates on these four retailers, published in May, August and November 2012.