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Carrefour: An OverviewCarrefourJanuary 2003
Carrefour:: An OverviewAn OverviewJanuary 2003January 2003
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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
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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
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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.
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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.
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Sales By Format, 2002
Hypermarkets58%
Supermarkets23%
Independent Retailers
1%
Foodservice1%
Franchised Stores
2%
Convenience Stores
5%Cash & Carries
2%
Supermarkets & Neighbourhood
Stores2%
Discount Stores6%
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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
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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
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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
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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
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Carrefour Sales Breakdown By Region, 2002
Europe84%
Asia7%
South America8%
Middle East1%
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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%
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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.
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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.
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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.
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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.
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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).
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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
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Leading Global Retailers Spread, 2002
Number of stores by country
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
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Leading Global Retailers Global Spread, 2002
Number of stores by country
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
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EuropeEuropeEurope
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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South AmericaSouth AmericaSouth America
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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
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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
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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.
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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.
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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?
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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.
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Asia-PacificAsiaAsia--PacificPacific
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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.
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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.
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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?
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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.
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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?
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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.
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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.
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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
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Africa & Middle EastAfrica & Middle EastAfrica & Middle East
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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.
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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
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.