Carrefour Plans New Market Strategy To Be Only Where It Knows It Can Win

By webadmin on 09:57 pm Aug 31, 2010
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Paris. Carrefour is prepared to consider offers for businesses in markets without leadership prospects, Chief Executive Officer Lars Olofsson said on Tuesday.

“I’m prepared in general terms to have a look at offers for the parts where we don’t believe we can become a leader,” Olofsson said.

He added that his three year turnaround plan was “profoundly changing” the French retailer, which reported a net profit of 82 million euro ($104 million) in the first half.

The result compares with a net loss of 58 million euro in the same period a year earlier, while revenue rose 6 percent to 43.73 billion euro.

Since Olofsson took over last year, Carrefour has sought to gain market share in France, which accounts for 40 percent of sales, by slashing prices, promoting the brand, introducing a discount range and accelerating the conversion of stores to the Carrefour banner.

Key to those changes include revamping the hypermarket concept that Carrefour claims to have invented in 1963. The superstores, which sell everything from flatscreen TVs to bikinis, are moving from an “everything under one roof” concept to a more targeted offering, he said.

In five pilot stores opened recently across Europe, Carrefour is offering new services such as child care and a “more pleasant shopping experience” with more color and a market atmosphere in the fresh produce area, Olofsson said.

Carrefour is targeting expansion in growing markets like Brazil and China. This year, it plans 1,250 store openings, including 143 in China and 374 in Turkey.

In the first half, Olofsson said Carrefour “turned in a good performance” and that he is “confident of achieving our 2010 objectives.” Carrefour booked one-off charges of 384 million euro in the six month period, mostly from restructuring.

Before joining Carrefour, Olofsson, a Swedish national, spent most of his career with Nestle.

AP, Bloomberg