Carrefour’s premium focus reaches Market fascia

Date : 21 December 2016

IGD attended the launch of Carrefour’s new Market concept in Madrid to see how the retailer is evolving the format. The store follows the recent opening of several premium Express stores in the city and a Mercado gourmet area at its Alcobendas flagship hypermarket.

The remodeled store, located in the affluent Salamanca district, has a sales area of 1,750 sq. m. and sells 12,000 products, 50% more than a standard Carrefour Market.

The tasteful use of tiles and wooden fittings gives the store a stylish appeal.

Source: IGD Research

The priority is fresh and organic

The store is divided on two floors, with the ground floor devoted to fresh produce and organic and the basement occupied by the dry groceries, non-food, wine and perfumery sections. Over a quarter of the new store’s product range are fresh products, with the department taking centre stage in the premium concept. The gourmet offering is also well represented with 1,000 products.

The fruit and vegetables department is located at the store’s entrance to provide a sense of freshness. In the middle of the store floor, a large organic section selling over 800 products connects with a fresh produce area at the back, which is inspired by traditional markets. The reformatted fresh department is in line with most competitors’ strategies and with what Carrefour itself is doing in its hypermarkets.

Low shelving provides more visibility, with the fruit and vegetables and fresh bakery sections now incorporating counters. In the bakery, freshness has been increased, as most breads are not just baked, but also actually made in-store.

Traditionally self-service in Carrefour Market stores, the bakery department in the new store design is supported with a counter.

Source: IGD Research

Services to please an increasingly demanding customer

The new store design offers several differentiated in-store services to satisfy the needs and demands of a typical affluent shopper living within its catchment area. These include:

  • Foodservice area: this is increasingly popular in Spain, particularly in hypermarkets – where there is an abundance of space – but not in supermarkets
  • Information screens: customers can get more information about products by scanning their barcodes
  • Home delivery: A delivery service covers the whole of Madrid, not just the surrounding area, as Carrefour believes the differentiated proposition of this store can appeal to shoppers throughout Madrid
  • Free wi-fi and mobile charging facilities
  • Domestic services: These can be hired in-store and include dry cleaning, laundry, shoe repair, photo processing and home pet care, amongst others

Organic occupies a prominent space in the middle of the sales floor.

Source: IGD Research

A neglected format

Carrefour’s supermarket format has been comparatively underinvested in during recent years. While the retailer is the undisputable leader in hypermarkets in Spain, its 115 supermarkets make it a smaller player within the channel, overshadowed by a range of competitors.

Carrefour has struggled to make strong headway with its supermarket format and to offer a truly competitive proposition versus the likes of more supermarket-focused competitors, such as market leader Mercadona and Eroski at a national level and against retailers like Ahorramás, Froiz and Bon Preu at a regional or city level.

Competition within the proximity format more widely has been further accentuated by the expansion of discounters like Dia and Lidl, who have also evolved their business models to mirror a supermarket offer. Dia has taken this to its furthest evolution by launching the La Plaza de Día supermarket banner.

The pace of expansion for the Carrefour Market fascia has also been slower than rivals, despite the fascia now able to be franchised. Instead Carrefour has focused its efforts in the development of other formats like its Express proximity fascia and its hypermarkets.

Sustainability is important, with the store boasting closed cabinets for chilled aisles and LED lightning.

Source: IGD Research

Further developments expected

Carrefour’s new concept provides a range of innovative features – in-store foodservice facilities, fresh prepared fish – and an array of services and an impressive fresh, organic and gourmet range. The concept is a step change for the retailer, in a competitive supermarket environment.

However, the premium character of the store make a large-scale rollout of the concept unlikely, which could see the weakness of Carrefour’s wider supermarket offer continue. This is particularly at a time when Mercadona and Lidl are evolving and launching new store concepts and Día is expanding La Plaza de Día. As such, while a big leap forward, we expect further development of its supermarket offer in the medium term from Carrefour Spain.

The store incorporates a foodservice area, a feature so far more common in its hypermarkets.

Source: IGD Research