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Carrefour: An OverviewCarrefourJanuary 2003

Carrefour:: An OverviewAn OverviewJanuary 2003January 2003


Table of Content

Overview

Background

Operations

Sales By Format

Carrefour By Country

Sales Breakdown By Region, 2002

Sales Breakdown By Country, 2002

Latest Major Developments

Carrefour In Context

Leading Global Retailers’ Spread, 2002

Analysis By Country

Prospects And Strategy

SWOT Analysis


Overview

Main address: Carrefour S.A., BP 419-16, 75769 Paris Cédex 1

6 Avenue Raymond Poincaré, Paris 75116, France

Tel: +33 1 53 70 19 00

Fax: +33 1 53 70 86 16

Website: www.carrefour.com

Carrefour is the world’s second largest retailer in terms of sales.

Truly global player with operations in over 30 countries.

Major formats are hypermarkets, supermarkets and discount stores.

Well known for entering and adapting to emerging markets.

Group turnover (2002): EUR85.6 billion

Total number of stores (including franchises): 10,673


Background

Carrefour SA was first listed on the French stock market in 1970. First opening stores in France during the 1960s, Carrefour went on to open the first hypermarkets in France and Europe.

First started expanding into the rest of Europe in the early 1970s and 1970At the same time the ED discount format was introduced.

The Carrefour own-label was introduced in 1985.

The first non-European store was opened in Brazil in 1975. Carrefour's firstAsian store opened in Taiwan in 1989.

Carrefour announced its intention to merge with Promodès at the end of August 1999 with the merger approved in January 2000. The Carrefourname was retained with the majority of Promodès stores rebranded. The merger pushes Carrefour to second place in global retailing.


Operation

Carrefour operates a diverse portfolio of formats, including hypermarkets, supermarkets, discount stores, cash & carries, c-stores and a number of neighbourhood store formats for independent retailers.

Pioneer of hypermarket format. All hypermarkets trade under the Carrefoubanner worldwide. With the opportunities for hypermarket openings in developed markets slowing, Carrefour’s strategy is to use the format to establish itself in emerging markets around the world.

Supermarkets trade under a variety of fascias, although Champion is the most important.

Discount stores are operated by Dia. Dia is now seen as a key brand forCarrefour’s future growth. Given the success of the Dia format with its highprofitability levels, it is not surprising that Carrefour is placing more emphasis on the discount banner in order to grow internationally –especially in South America and Asia.

The strategy is to establish all these major formats (hypermarkets, supermarkets and discount stores) in all countries.


Sales By Format, 2002

Hypermarkets58%

Supermarkets23%

Independent Retailers

1%

Foodservice1%

Franchised Stores

2%

Convenience Stores

5%Cash & Carries

2%

Supermarkets & Neighbourhood

Stores2%

Discount Stores6%


Carrefour by Country: Asia Pacifi

BelgiumFormats: Hypermarkets, supermarkets, c-storesNo. of stores: 4842002 retail sales: €5.3 billion

Czech RepublicFormats: HypermarketsNo. of stores: 82002 retail sales: €0.3 billion

PortugalFormats: Hypermarkets, discount storesNo. of stores: 3462002 retail sales: €0.9 billion

RomaniaFormats: HypermarketsNo. of stores: 12002 retail sales: €0.1 billion

SlovakiaFormats: HypermarketsNo. of stores: 42002 retail sales: €0.1 billion

SpainFormat: Hypermarkets, supermarkets, discount stores, cash carriesNo. of stores: 2,8022002 retail sales: €11.7 billion

SwitzerlandFormats: HypermarketsNo. of stores: 112002 retail sales: €0.6 billion

FranceFormats: Hypermarkets, supermarkets, discount stores, c-stores, cash & carries, independent retailers, forecourt storesNo. of stores: 4,5302002 retail sales: €45.2 billion

GreeceFormats: Hypermarkets, supermarkets, discount storesNo. of stores: 4142002 retail sales: €1.4 billion

ItalyFormats: Hypermarkets, supermarkets, c-stores, cash & carriesNo. of stores: 9462002 retail sales: €6.3 billion

PolandFormats: Hypermarkets, supermarketsNo. of stores: 762002 retail sales: €0.8 billion


Carrefour by Country: South America

ArgentinaFormats: Discount stores, hypermarkets, supermarketsNo. of stores: 4512002 retail sales: €1.5 billion

BrazilFormats: Hypermarkets, supermarkets, c-storesNo. of stores: 2672002 retail sales: €3.7 billion

ChileFormats: HypermarketsNo. of stores: 42002 retail sales: €0.1 billion

ColombiaFormats: HypermarketsNo. of stores: 82002 retail sales: €0.2 billion

Dominican RepublicFormats: HypermarketsNo. of stores: 12002 retail sales: €0.1 billion

MexicoFormats: HypermarketsNo. of stores: 212002 retail sales: €0.8 billion


Carrefour by Country: Asia Pacifi

ChinaFormats: Discount stores,

hypermarketsNo. of stores: 622002 retail sales: €1.5 billion

IndonesiaFormats: HypermarketsNo. of stores: 92002 retail sales: €0.2 billion

JapanFormats: HypermarketsNo. of stores: 42002 retail sales: €0.2 billion

MalaysiaFormats: HypermarketsNo. of stores: 62002 retail sales: €0.3 billion

SingaporeFormats: HypermarketsNo. of stores: 12002 retail sales: €0.1 billion

South KoreaFormats: HypermarketsNo. of stores: 252002 retail sales: €1.3 billion

TaiwanFormats: HypermarketsNo. of stores: 282002 retail sales: €1.4 billion


Carrefour by Country: Africa & Middle Eas

EgyptFormats: HypermarketsNo. of stores: 12002 retail sales: na

OmanFormats: HypermarketsNo. of stores: 12002 retail sales: €0.1 billion

QatarFormats: HypermarketsNo. of stores: 12002 retail sales: €0.1 billion

TunisiaFormats: HypermarketsNo. of stores: 12002 retail sales: €0.04 billion

TurkeyFormats: Hypermarkets, supermarkets, discount storesNo. of stores: 1342002 retail sales: €4.4 billion

UAEFormats: Hypermarkets No. of stores: 82002 retail sales: €0.5 billion


Carrefour Sales Breakdown By Region, 2002

Europe84%

Asia7%

South America8%

Middle East1%


Carrefour Sales Breakdown By Country, 2002

France52%

Italy7%

Greece2%

Spain13%

Switzerland1%

Taiwan2%

Smallest fifteen countries

4%

Argentina2%

Brazil4%

China2%

Belgium6%

Poland1%

Mexico1%

South Korea2%

Portugal1%


Latest Major Developments (1/2

January 2003 - Carrefour has reported a slip in gross sales for 2002 of 1.6%to EUR76.78 billion. Although currency effects in emerging markets (devaluations in Brazil and Argentina and weaker Asian currencies) knockesales growth back, on a constant currency basis sales rose by 4.5%.

January 2003 – Unconfirmed reports suggest Carrefour is to enter BulgariaThis follows on from reports throughout 2002 that the group is planning entry into Russia and the Philippines.

December 2002 - Opening of the first Carrefour hypermarket in Egypt by thMajid Al Futtaim group which holds the Carrefour franchise for countries inthe Middle East.

December 2002 – Carrefour acquires the 20.3% stake not already owned inits Spanish subsidiary, Centros Comerciales Carrefour.


Latest Major Developments (2/2

August 2002 – CEO Daniel Bernard stresses that Carrefour is now coming tothe end of the three year process of merging with Promodès stating "The synergies from that are in place, but there are still more to come, particularly in logistics. That's a five to six year process."

May 2002 - Carrefour acquires 12 outlets from the failed Metro supermarkechain in Argentina.

February 2002 – Carrefour confirms that it does indeed plan to open discount stores in China under the Dia banner as previously rumoured. Thefirst opening is scheduled for Shanghai in 2003. Although it is too early to say how many Dia stores the company will open in China, Carrefour believethat the potential market is enormous.


Carrefour In Contex

Leading global grocery/GM retailers in terms of sales, 2002:

1. Wal-Mart – EUR255.1 billion.

2. Carrefour – EUR87.2 billion.

3. Ahold – EUR75.4 billion.

4. Kroger – EUR58.9 billion.

5. Ito-Yokado – EUR57.7 billion.

6. Metro Group – EUR56.1 billion.

7. Target – EUR46.9 billion.

8. Albertsons – EUR44.6 billion.

9. Kmart – EUR42.5 billion.

10. Tesco – EUR41.3 billion.


Carrefour In Contex

Leading global grocery/GM retailers in terms of countries of operation, 2002:

1. Carrefour – 31 countries.

2. Ahold – 26 countries.

- Metro Group – 26 countries.

4. Ito-Yokado – 13 countries.

- Tesco – 13 countries.

6. Wal-Mart – 11 countries.

7. Kroger – 1 country.

- Target – 1 country.

- Albertsons – 1 country

- Kmart – 1 country.


Carrefour In Contex

Leading global grocery/GM retailers in terms of number of stores, 2002:

1. Ito-Yokado – 23,772 stores (5,562,448m2).

2. Carrefour – 10,673 stores (12,071,981m2).

3. Ahold – 9,276 stores (9,766,550m2).

4. Wal-Mart – 5,080 stores (49,632,668m2).

5. Kroger – 3,668 stores (11,659,343m2).

6. Metro Group – 2,393 stores (11,125,900m2).

7. Albertsons – 2,285 stores (9,099,890m2).

8. Tesco – 2,276 stores (4,284,561m2).

9. Kmart – 1,620 stores (12,524,500m2).

10. Target – 1,476 stores (15,758,730m2).


Leading Global Retailers Spread, 2002

Number of stores by country

CountryArgentinaAustriaBelgiumBulgariaBrazilCanadaChileChinaColombiaCosta RicaCroatiaCzech RepDenmarkDominican RepublicEcuadorEgyptEl SalvadorEstoniaFranceGermany

Carrefour451

484

267

462

8

8

1

1

4,530

Wal-Mart11

22201

25

95

Ahold245

142

78

96

20921

1

216

Tesco

17

1

Metro

4123

8

18

110

4

1171,791

…continued next pag


Leading Global Retailers Spread, 2002


CountryGreeceGuatemalaHondurasHungaryIndonesiaItalyJapanLatviaLithuaniaLuxembourgMalaysiaMexicoMoroccoNetherlandsNicaraguaNorwayOmanParaguayPeruPhilippines

Carrefour414

9946

4

621

1

Wal-Mart

405

595

Ahold

9827

21

3338

41

2,28020

1,173

1239

Tesco

52

3

Metro14

32

791

3

522

…continued next pag


Leading Global Retailers Global Spread, 2002


CountryPuerto RicoPolandPortugalQatarRepublic of IrelandRomaniaRussiaSingaporeSlovakiaSouth KoreaSpainSwedenSwitzerlandTaiwanThailandTunisiaTurkeyUAEUKUSAVietnam

Carrefour

76346

1

1

14

252,802

112817

1134

8

Wal-Mart54

12

2593,401

Ahold

179

12

6942,127

51

1,628

Tesco

77

77

1720

349

1,975

Metro

8110

166

6

36

15

23

29

2


EuropeEuropeEurope


Analysis By Country: Belgium

Carrefour’s status: LeaderMain competitors(s): Delhaize, Colruyt, Cora

Strengths1. Market leader.2. Operations span a wide variety of

formats/fascias.3. Hypermarkets performing well in

non-food ranges.

Opportunities1. Discount store development.2. More forecourt stores.3. Greater synergies between different

supermarket chains.

Weaknesses1. Unprofitable since acquisition.2. Conversion of hypermarkets to

Carrefour banner has alienated somshoppers.

3. Labour relations have been problematic.

Threats

1. Colruyt set to add space through Laurus deal.


Analysis By Country: Czech Republi

Carrefour’s status: Number 8Main competitors(s): Ahold, Schwarz, Rewe

Strengths1. Credible economy ranges.2. Adaptable hypermarket format.3. Local buying infrastructure.4. Impressive food and non-food offer.

Opportunities1. Begin to catch up in discount store

terms.2. More smaller format hypermarkets.3. Possible withdrawals by foreign

players could provide acquisition opportunity.

Weaknesses1. Lagging rival operators by a large

margin.2. Perceived as too upmarket by many

shoppers. 3. Has watched as other players have

started opening discount units.

Threats

1. Faced by strong competition from impressive international rivals.

2. Could risk being seen as leisure/tourist destination rather than a shopping venue.


Analysis By Country: France

Carrefour’s status: Leader Main competitors(s): Leclerc, ITM, Auchan

Strengths1. Overwhelming leader.2. Immense brand awareness and trust.3. Multi-format presence in all areas of

country.4. Extensive private label lines.

Opportunities1. Development of clothing supply

chain and ranges.2. Supermarket and discount store

openings.3. Growth of c-store/forecourt store

business.

Weaknesses1. Lost sight of quality in recent

price-led skirmishes with rivals.2. Lost market share to Leclerc.3. Disappointing E-commerce.4. Promodès integration has not bee

seamless.

Threats

1. Heavy price competition –especially from German discounters.

2. Not much scope for acquisitions.3. Planning laws are restrictive.4. Rivals joining forces.5. Wal-Mart evaluating entry into

France.


Analysis By Country: Greece

Carrefour’s status: Leader Main competitors(s): Delhaize, Sklavenitis, Veropoulos

Strengths1. Number one in the market.2. Joint venture and joint branding

mean the stores have a “local”appeal.

3. Active in hypers, supers and discount stores.

4. Franchise deals mean low cost and low risk.

Opportunities1. Development of clothing supply

chain and ranges.2. Still potential for many more stores.3. Fairly relaxed competition laws

could enable sizeable acquisitions.

Weaknesses1. Lower share of locally sourced good

than in other markets.2. Some critics suggest that rebrandin

of certain operations has been rushed and confusing.

Threats

1. Smaller rivals such as Delhaize and Atlantic are fighting hard for marketshare.


Analysis By Country: Italy

Carrefour’s status: Number 3Main competitors(s): Coop Italia, Conad, Auchan

Strengths1. Reasonable hypermarket and

supermarket presence.2. Effectively ditched frozen food chain.3. Own-brands and non-food ranges

compare well to larger domestic rivals.

Opportunities1. Acquisitions.2. Could introduce Dia in the longer

term.3. Convenience format is ripe for

expansion.4. Growth into underdeveloped South.

Weaknesses1. Stores appear quite clinical

alongside their Italian counterparts2. Over-concentration in North-East.

Threats

1. Conad and Cop Italia are strong rivals with impressive multi-format operations.

2. Auchan is poised for sustained growth in Italy.

3. Store openings are beset with red tape.


Analysis By Country: Poland

Carrefour’s status: Number 5Main competitors(s): Auchan, Jerónimo Martins, Casino

Strengths1. Decent network hypermarkets and

supermarkets.2. Has been enjoying encouraging

comparable sales growth.

Opportunities1. Ambitious growth targets.2. Discount stores could be launched.3. Shift away from price-led to quality-

led competition?4. Introduction of own-brands.

Weaknesses1. Lack of private label offer.2. Has been slow to convert the Globi

stores inherited from GIB.3. Sat back as Tesco picked up Hit.

Threats

1. Up against some of Europe’s finest grocers.

2. Viable hypermarket locations are increasingly thin on the ground.

3. Growing competition in non-food areas from specialist chains.


Analysis By Country: Portuga

Carrefour’s status: Number 3Main competitors(s): Modelo Continente, Jerónimo Martins, Auchan

Strengths1. Strong dual presence through hypers

and discount stores.2. Discount stores have been

performing very well.3. Own brands selling well in food and

non-food.

Opportunities1. Mainstream supermarkets could be

unveiled.

Weaknesses1. Hypermarket openings have been

slower than hoped.2. Strategy has occasional appeared

fuzzy in Portugal. 3. Conflict with Modelo Continente.

Threats

1. Ongoing arguments with Modelo Continente appear to be a counterproductive distraction.

2. Lidl wants to challenge in discounting.


Analysis By Country: Romania

Carrefour’s status: Number 3Main competitors(s): Rewe, Delhaize, Cora

Strengths1. First mover status among West

European hypermarket operators.2. Has used a low-risk franchised route

to market. 3. Comprehensive array of Romanian

produce.

Opportunities1. Could expand into other formats.2. Further links with local suppliers.

Weaknesses1. Has lagged other players in terms o

discount store opening.

Threats

1. Increasing competition for what stilamounts to a small market.

2. Unclear if Romanian consumer economy will support many more hypermarkets.


Analysis By Country: Slovakia

Carrefour’s status: Number 5Main competitors(s): Tesco, Rewe, Prima Zdrodj

Strengths1. The Carrefour hypermarket format is

an impressive and popular one in Slovakia.

2. Decent private label offering.

Opportunities1. Opening of more hypermarkets.2. Diversification into discounting –

lack of strong competition in this sub-sector of the market.

Weaknesses1. Stalled on four stores for a couple o

years.2. Tesco appears to be building an

unassailable lead.

Threats

1. Overtaken by more players as growth plans falter.

2. Carrefour stores could be of interestto a more aggressive predator.


Analysis By Country: Spain

Carrefour’s status: LeaderMain competitors(s): Eroski, Mercadona, ECI

Strengths1. Dominant market leader.2. Credible own-brand strategy and

performance. 3. Vast discount store network.

Opportunities1. More new stores across all banners.2. Potential for small regional

acquisitions.

Weaknesses1. Poor e-commerce performance. 2. Transformation from Continente to

Carrefour lacked finesse and sensitivity towards Continenteshoppers.

3. Champion less impressive thanCarrefour and Dia.

4. El Corte Inglés still leads the way infresh food merchandising.

Threats

1. Aldi, Lidl and Tengelmann are chasing discount market share.

2. Spanish food retailers are not pushovers – the likes of Caprabo, Eroski and Mercadona are fighting back.


Analysis By Country: Switzerland

Carrefour’s status: Number 5Main competitors(s): Migros, Coop Schweiz, Bon appetit

Strengths1. One of the country’s leading

hypermarket operators.2. Foreign pioneer in once protective

and low competition market.3. Formed strong JV with local partner

– instant expertise. 4. Much wider product ranges than

rivals.

Opportunities1. New stores.2. Could pick up some smaller

operators. 3. Discount stores could be an option.

Weaknesses1. Outbid for Waro. 2. Store conversions angered some

Jumbo shoppers.3. Again, its growth targets appear

over-ambitious.

Threats

1. Crowded market ruled by two powerful giants.

2. Switzerland is a fairly small market scope for hypermarket developmentis patchy at best.


South AmericaSouth AmericaSouth America


Analysis By Country: Argentina

Carrefour’s status: LeaderMain competitors(s): Ahold, Coto, Cencosud

Strengths1. Market leader.2. Multi-format approach.3. Discount formula has appealed in

times of crisis.4. Hypermarkets performing well in

non-food ranges.

Opportunities1. Geographic expansion.2. Potential acquisitions (Eki in

particular).3. Increase private-label penetration.

Weaknesses1. Over-concentrated in the Greater

Buenos Aires region.2. Weak own-brand sales in Norte

supermarkets.

Threats

1. Economic/political uncertainty.2. Wal-Mart looking for further growth


Analysis By Country: Brazi

Carrefour’s status: Number 2Main competitors(s): Casino, Sendas, Modelo Continente

Strengths1. Hypermarket leader.2. Successful launch of Dia.3. High participation of own-label in

turnover.4. Impressive clothing sales.

Opportunities1. More discount store development.2. Growth in Sao Paulo.

Weaknesses1. Missed opportunity to acquire Sé

supermarket chain.2. Limited geographical spread.

Threats

1. Consolidation of leadership by Casino.

2. Wal-Mart gearing up for growth pus


Analysis By Country: Chile

Carrefour’s status: Number 5Main competitors(s): D&S, Ahold, Cencosud

Strengths1. Impressive hypermarket operation.2. Strong player in non-foods.3. Good mix of local and international

products.

Opportunities1. Supermarket openings/acquisitions.2. Discount store debut?3. More own-label ranges.

Weaknesses1. Growth rate has been fairly

laborious.2. Entirely reliant on Santiago as its

market.

Threats

1. Seems to be lagging main competitors in growth terms.

2. Commitment to Chilean market andCarrefour’s plans both appear uncertain.


Analysis By Country: Colombia

Carrefour’s status: Number 4Main competitors(s): Casino, Carrulla Vivero, Olimpica

Strengths1. Very price-competitive compared to

rivals.2. Relatively large stores with broad

non-food lines.3. Store openings are progressing well.4. High proportion of locally sourced

products.

Opportunities1. Organic supermarket and discount

store growth.2. Takeover of Carulla Vivero.3. Expansion beyond Medellin and

Bogota.

Weaknesses1. Dwarfed by compatriot Casino.2. Own-brands relatively

underdeveloped. 3. Has missed out on significant

takeovers.

Threats

1. Someone else takes over Carulla Vivero.


Analysis By Country: Dominican Republi

Carrefour’s status: N/aMain competitors(s): N/a

Strengths1. Lack of decent competition.2. Excellent store location in modern

shopping centre.

Opportunities

Weaknesses1. Slowing sales performance.

Threats

1. Economic stagnation.2. Market exit?


Analysis By Country: Mexico

Carrefour’s status: Number 6Main competitors(s): Wal-Mart, Comerci, Soriana

Strengths1. Higher quality of retailing compare

to rivals.2. Large average store size enables

wider ranges.3. Good mix of local/national brands.

Opportunities1. Acquisition of larger and/or smaller

players.2. Discount stores would be well

received by Mexican shoppers.

Weaknesses1. Stuck with limited store base for

several years.2. Perceived as expensive.3. Missed out on taking over Auchan’s

stores.

Threats

1. All-conquering Wal-Mart is taking over the market.

2. Smaller niche players such as Gigante and H.E. Butt are catering for the higher end of the market.


Asia-PacificAsiaAsia--PacificPacific


Analysis By Country: China

Carrefour’s status: Number 5Main competitors(s): CRE, Dairy Farm, AS Watson, Shanghai Lianhua

Strengths1. One of the first Western entrants.

Regarded as most successful foreign operators.

2. Has been adaptable in face of changing government policies.

3. Format and product mix have been modified well to meet local demands.

Opportunities1. Supermarket and discount store

development.2. A massive potential market.3. Higher own-label penetration.

Weaknesses1. Has appeared ignorant of local

planning laws.2. Still a weak showing from own-

branded goods.

Threats

1. Dearth of local managers.2. Local players have consolidated to

fend off the likes of Carrefour.3. Policy changes by central/local

governments. 4. Wal-Mart and Tesco etc looking to

compete.


Analysis By Country: Indonesia

Carrefour’s status: Number 3 Main competitors(s): Delhaize, Dairy Farm, Alfa Retailindo

Strengths1. Leading hypermarket operator in the

country.2. Is able to mix local products with

sought-after international brands.3. Is able to appeal to more affluent

local consumers.

Opportunities1. Long term scope for discount chain.2. There are several potential takeover

targets in the supermarket sector.

Weaknesses1. Lack of definite expansion timetable2. Over-reliant on exported French

management.

Threats

1. General political instability.2. Carrefour has been specifically

targeted by violent activists.


Analysis By Country: Japan

Carrefour’s status: Number 11Main competitors(s): Aeon , Daiei, Uny

Strengths1. Non-food ranges.2. Innovative merchandising.

Opportunities1. Acquisitions/partnerships.

Weaknesses1. Has failed to meet opening targets.2. Has not effectively targeted

Japanese shoppers.3. Lack of localised sourcing.

Threats

1. New store sites are hard to come by2. Wal-Mart is taking control of Seiyu. 3. Difficult deflationary economy.4. Market exit?


Analysis By Country: Malaysia

Carrefour’s status: Number 4Main competitors(s): Dairy Farm, Aeon, Store Corporation

Strengths1. Non-food ranges.2. Innovative merchandising.

Opportunities1. Buying up or leasing existing

properties.2. Implementation of private label

programme.

Weaknesses1. Slow progress in opening units.2. Own-brands yet to be introduced on

any real scale.3. Lack of localised sourcing.

Threats

1. Robust local and international competitors.

2. Increasingly protectionist government.


Analysis By Country: Singapore

Carrefour’s status: Number 7Main competitors(s): NTUC Fairprice, Dairy Farm, Delhaize

Strengths1. Operations are now profitable.2. Attractive hypermarket with

typically high merchandising standards.

Opportunities1. Opening of smaller stores.2. Acquisitions of/partnerships with

local businesses.

Weaknesses1. Comprehensive failure to meet initia

growth targets of six years ago. 2. Has remained stalled on a single

store.

Threats

1. Shortage of suitable land and development sites.

2. Market exit?


Analysis By Country: South Korea

Carrefour’s status: Number 3Main competitors(s): Nongshima, Shinsegae, Lotte

Strengths1. Sophisticated hypermarket format

that compares well with indigenous stores.

2. Has achieved rapid expansion.

Opportunities1. Continued store opening.2. Discount-focused rivals suggest the

possibility of an upmarket supermarket operation in larger cities – launch of Champion?

Weaknesses1. Occasional legal brinkmanship. 2. Has failed to exert a damaging

impact on local competitors.

Threats

1. Wal-Mart and domestic competitorswill provide a stiff challenge.

2. Economic problems could cause a flight to value retailers.


Analysis By Country: Taiwan

Carrefour’s status: Number 2Main competitors(s): Ito-Yokado, Auchan, Casino

Strengths1. Leading hypermarket business in

Taiwan.2. Has tailored its offer well.

Opportunities1. Opening schedule looks both

optimistic and achievable.2. Could pick up some smaller

operators. 3. Discount stores could be an option.

Weaknesses1. Has lost out on some potential sites

to Auchan.

Threats

1. Casino and Auchan will be challenging for locations.


Analysis By Country: Thailand

Carrefour’s status: Number 4Main competitors(s): Tesco, Casino, Ito-Yokado

Strengths1. Large stores, wide ranges and

distinctive Carrefour panache.2. Local goods have encouraged local

appeal.

Opportunities1. Geographic expansion.2. Supermarket and discount store

development in the face of strong hypermarket competition.

Weaknesses1. Over reliant on Bangkok market. 2. Seems to have let Casino and Tesco

set the pace.

Threats

1. Thai government is appearing muchless friendly to large foreign retailer


Africa & Middle EastAfrica & Middle EastAfrica & Middle East


Analysis By Country: Egyp

Carrefour’s status: N/aMain competitors(s): Metro (Egypt), Ragab Sons, Alfa Market

Strengths1. Could easily become market leader

with a single store.2. Egypt’s only true hypermarket

operator.3. Franchise deal is fast track to local

knowledge.

Opportunities1. Egypt would be receptive to Dia and

Champion.2. Up to 15 hypermarkets could be

trading.3. Acquisitions/ joint ventures.

Weaknesses1. Has taken longer than expected to

open first store.

Threats

1. Sainsbury’s exit demonstrates a certain local wariness of foreign retailers.

2. Egypt is a difficult economic, politicaand social environment.


Analysis By Country: Oman

Carrefour’s status: Number 1 (tbc)Main competitors(s): Various

Strengths1. Market leader in modern distribution.2. Only hypermarket operator in the

country.3. Has local partner with local

knowledge.

Opportunities1. One or two more hypermarkets.2. Launch of supermarkets.

Weaknesses1. Long-winded process between

planning and opening of store.

Threats

1. Very limited scope for further stores


Analysis By Country: Qata

Carrefour’s status: LeaderMain competitors(s): Various

Strengths1. Only hypermarket operator in the

country.2. Has proven popular with locals and

international shoppers alike. 3. Run by local franchise partner who

knows market.

Opportunities1. Development of additional

products/services.

Weaknesses1. Has yet to fully adapt to local marke

conditions.

Threats

1. Extremely limited potential for morestores.


Analysis By Country: Tunisia

Carrefour’s status: Number 1Main competitors(s): Casino, Touta, Magro

Strengths1. Market leader.2. Brave market entry supported by JV

partner. 3. High quality store with sizeable

customer base.

Opportunities1. Broadening of store’s appeal through

expanded product/ service ranges.

Weaknesses1. Demand largely dependent on Tunis

Threats

1. Market may not be able to support many more outlets.


Analysis By Country: Turkey

Carrefour’s status: Number 3Main competitors(s): Migros Türk, Bim, Tansas

Strengths1. Rapidly developing three distinct

formats.2. JV partner can offer significant

financial backing as well as market intelligence.

3. Can offer Western-style goods to appeal to younger Turkish shoppers.

Opportunities1. Massive scope for store openings. 2. Possible link up with existing Turkish

retailers.

Weaknesses1. Has arguably focused too heavily on

price rather than quality and differentiation.

2. Disappointing progress in Championopenings.

Threats

1. Already strong competition in hypermarkets (Migros, Yimpas etc) and discount stores (Bim).

2. Tesco looks set to offer more competition.


Analysis By Country: UA

Carrefour’s status: LeaderMain competitors(s): Giant, Choitram, Shop N Save

Strengths1. Clear market leader.2. Impressive stores set in decent

shopping centres.

Opportunities1. High per capita spending should lead

to decent profitability. 2. Despite country’s wealth, discount

stores could succeed.

Weaknesses1. Store openings have slowed.

Threats

1. Limited market size suggests that further growth will be more difficultto achieve.


Prospects and Strategy (1/2

Carrefour is now focusing on its three core formats – hypermarkets, supermarkets and discount stores.

Dia discount stores in particular are now seen as a key driver for Carrefourfuture growth. Given the success of the Dia format with its high profitabilitylevels, it is not surprising that Carrefour is placing more emphasis on the discount banner in order to grow internationally.

In more developed markets such as Europe, becoming a multi-format retailer is taking on more importance as legislation, particularly in Europe, plays against opening large hypermarkets.

In Europe, growth is going to come from the emerging markets of Eastern or Central Europe. Carrefour already has operations in Romania, Poland andthe Czech and Slovak Republics to which other formats could be added in the future. Carrefour has also been rumoured to be considering entry into Bulgaria and/or Russia. However, as in the rest of Europe, competition within these markets is intensifying.

Future growth is therefore increasingly going to come from more developing markets, especially South America and Asia.


Prospects and Strategy (2/2

Despite the economic downturn in the region, Carrefour is still committed tpursuing further expansion in South America. In fact, various opportunitiesare likely to present themselves in the acquisition of more vulnerable local players. It seems likely for example that the company will acquire the 200-strong Eki chain in Argentina.

Expansion into the Asian market is now top priority, as it is believed that this region offers the largest opportunities for growth. Carrefour is particularly bullish about its prospects in China, where it is soon planning tintroduce its Dia discount store format.

Carrefour has proved itself especially adept at entering developing marketsat an early stage. Carrefour’s approach is usually to establish a chain of hypermarkets and develop a range of own brands, and then introduce its supermarket or discount store formats. This gives Carrefour first-mover advantage in many markets.

Carrefour has hypermarket-only operations in 22 countries. Therefore thereis the opportunity in many of these markets to expand its operations to include supermarkets and discount stores.

Possibility of a major acquisition in a more developed market – there has been speculation regarding a possible return to the UK or USA.


SWOT Analysis (1/2

Weaknesses• Has consistently underachieved its

own ambitious growth targets in many countries.

• Failed to live up to pre-merger expectations in terms of projected benefits.

• Still has an unwieldy portfolio of stores in some countries – e.g. Francand Belgium.

• E-commerce development has been lacklustre.

• Dearth of local management/expertise in some markets.

Strengths• World’s second largest retailer.• Most internationalised retailer.• Dominant (top three) position in 17

out of 31 markets.• World leader in hypermarkets.• European leader in supermarkets.• World’s sixth largest discounter.• Early mover into many emerging

markets.• Strong brand in many markets.• Enviable own-label portfolio.


SWOT Analysis (2/2

Opportunities• Organic expansion in existing markets.• Acquisition of vulnerable local players.• Entry into new markets, especially in

Asia and South America. • Possible entry into selected Eastern

and Central European markets.• Launch and expansion of supermarket

and discount store operations in markets where it already has hypermarkets.

• Possible major acquisition in more mature market.

Threats• Continuing intensification of

competition within more developed markets, especially in Europe.

• Economic problems in South Americamay lead to downturn in trading environment.

• Ambitious international expansion plans of major rivals such as Wal-Mart and Tesco.

• Greater legislation in emerging markets to limit influence of foreign-owned large stores.

• Potential hostile takeover due to lowshare price.

carrefour swot

Documents

clothing supply chain

latest major developments

high profitability levels

vulnerable local players

ambitious growth targets

discount store development

hypermarket operator

smaller operators