In an interview with LSA, Carrefour's chief executive, Georges Plassat, has discussed the retailer's recent initiatives and what this means for it in the short to medium term.
Carrefour to be built on three geographic pillars
Plassat stated that Carrefour had expanded globally too far, which had stretched its resources, with the recent disposals easing 'the financial pressure off the company'. Following on from the sales and changes to joint venture agreements, he stated that Carrefour would develop three geographical pillars: Europe, South America – built on the strong foundations of Brazil and Argentina and its hypermarkets and Atacadão formats – and Asia – where he highlighted China and Taiwan. He refuted suggestions that Carrefour would exit Brazil or China.
In other news this week, in Europe Carrefour has opened its first store in a municipal market in Spain, extending its reach into neighbourhood locations. Further afield, Carrefour announced a joint venture deal that will help it expand into eight countries in West and Central Africa.
Focus on France to be sustained
Carrefour's chief executive said that investment was needed in France as it was a 'country that needs investment' and that it had suffered from a lack of spending for 10 years. Commenting on the retailer's investment plans for 2013, Plassat said that €2.3 billion would be spent globally, with a big portion of this in France.
He underlined how the retailer was trying to pass more autonomy and decision making responsibility to store managers. Plassat said that there had been ‘excessive centralisation' following the merger of Carrefour and Promodès, which he said had ‘killed store based initiatives'. Recent appointments were highlighted as likely to engender empowerment of store managers and enable them to build a stronger bond with shoppers.
Plassat said that Carrefour would also support local producers, highlighting that it will pay farmers more for their milk. This initiative is likely to work well with the retailer's recent move to boost the visibility of local producers in store, especially within fresh produce. For more please see our recent store visit to Carrefour's hypermarket in Lille.
Evolution of hypermarkets to continue
Although he noted that the retailer must think multichannel and not just about its hypermarkets, there would be continued investment in its largest stores. In terms of product mix, Plassat said that to remove non-food from its hypermarkets would be a mistake, although the range would be adapted so that stores had a wider permanent assortment, albeit at the detriment of seasonal offers. Specifically, he said that decisions about what seasonal products to stock would be decided by the relevant store manager.
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