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Carrefour action plan reaches a critical juncture

16 Jan 2015

Planet Retail believes Carrefour CEO Plassat’s ultimate success or failure depends on (1) the management of domestic and European acquisitions; (2) the pricing strategy in its core home market, and (3) its ability or otherwise to drive its international operations forward.

On Carrefour’s Q4 2014 results, Gildas Aitamer, Retail Analyst at Planet Retail, commented:

“Carrefour has managed to find opportunities in a depressed European economic environment. This has seen successive acquisitions in Greece and Italy, the merger of its Bulgarian operations with a local player and its masterstroke: the return of Dia France.

“Dia France is in the doldrums and a quick and smooth integration into the portfolio will be paramount to avoid further pressure on the retailer’s bottom line. This task has been deemed sufficiently important for Carrefour Belgium’s restructuring veteran Gérard Lavinay to be called in.

“The year was also eventful in Brazil. The retailer left its biggest move to last by hiring the former head of Brazilian arch-rival, Abilio Diniz. This confirms our earlier view that Carrefour Brazil needs influential management expertise more than funding for now. Diniz’ value will be his local knowledge, which is expected to deliver positive results.

“Meanwhile, Carrefour China introduced its first neighbourhood store. While we view the attempt to move into wealthier urban centres positively, the lack of success on the format by other international retailers, like Walmart and Tesco, suggests hard work ahead. And this fails to address the core Chinese problem: hypermarkets. If one looks beyond the expansion-fuelled top line figures, performance here remain worrying, to say the least.”

 

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Gildas is available for further comment and can be contacted on +49 (0) 6996 21 7575 or via e-mail at gildas.aitamer@planetretail.net

PRESS:

Robyn Ashman, Marketing Director

Tel: +44 (0) 20 7715 6021; E-mail: Robyn.Ashman@Planetretail.net