Hellal Mariem

Erasmus Student Number: 069092107

Word count: 9722 words

ACE 3002: Strategic Marketing

The internationalisation of Carrefour

A marketing critic of Carrefour’s international expansion

Executive summary:

Carrefour opened its first hypermarket in Spain in 1973. It is the first store out of its domestic
market. After that Carrefour gradually spread across the world in three main geographic areas:
Europe, Latin America and Asia. Now Carrefour, the world’s second largest retailer after
Wal-Mart has announced this year a net profit increase of 10,8 percent to 706 million euros.
This improvement is due to an aggressive price reduction and the will to attract new
customers across the world by opening new stores. These results exceed most analysts’
expectations. In France, sales grow 6, 3 percent to 17, 94 billion euros and overall. Moreover,
more than a half (almost 52 percent) of the Carrefour consolidated net sales in 2005 is made
out of its domestic market. “We are growing faster in a more targeted way” said the Chief
executive officer who confirmed also that Carrefour was in line to open 100 hypermarkets
before yearend.

With the emergent market, which is represented by the Chinese market for instance, Carrefour
sees in the Asia-pacific area the ability to develop its activities and to increase its revenue.
Their overseas expansion focuses on a few key emerging markets. These markets, which
offered growth opportunities, are characterized by the need to have retail structures.
Carrefour’s marketing strategies is mainly to strengthen its position by increasing the number
of overseas store and by cutting prices. The aim is to develop the Carrefour brand worldwide.
Thus the challenge is to success the development of the Carrefour network in Latin America,
Asia and especially in China.

Nowadays Carrefour has to be confronted to increasingly strong competitors like Wal-Mart or

Tesco. Therefore it has to develop international strategies in order to strengthen its leadership
position in Europe and to succeed in the American and Asian markets. For that it adds new
floor area by new acquisitions, store openings or enlargements. It repositions its prices by
practising an offensive price reduction. In addition it adapts and develops new stores’ formats
in each country. To succeed Carrefour need to learn to know both the Asian and the Latin-
American cultures in order to be able to attract these people. The Carrefour’s image remains
seen as a high added value brand. Thus the group can hope to success in the Asian market.

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 Table of contents

Introduction 4
1 Methodology 5
2 Business description 6
3 Market screening: PEST Analysis 8
3. 1 Political issues 8
3. 2 Economic issues 8
3. 3 Social issues 9
3. 4 Technologic issues 9
4 Carrefour strategy 10
4. 1 Its position 10
4. 2 The Competitors 10
4. 3 Carrefour’s objectives 13
4. 4 The augmented product 14
4. 5 Brand component evaluation 15
4. 6 Brand personality evaluation 15
5 The Carrefour’s expansion around the world 15
5. 1 Motives for the international expansion 18
5. 2 Carrefour international strategy 19
5. 3 Carrefour around the world 19
5. 3. A Europe 19
5. 3. B Latin America 20
5. 3. C Asia 20
China 21
What about India 22
5. 3. D The former countries 22
6 Marketing Analyses 23
6. 1 SWOT Analyses 23
6. 2 The BCG Matrix applied to Carrefour 24
7 Marketing mix 26
7. 1 Price 26
7. 2 Product 27
7. 3 Place 27
7. 4 Promotion 28
7. 5 Personnel 28
8 Concluding remarks and recommendations for the future 29
Bibliography 30
Appendix 1: Chinese Carrefour advertisement 33

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Introduction:

Carrefour SA is the first retailer in Europe and the second largest worldwide. It has stores in
29 countries in Latin America, Asia and Europe. Yet there is also countries where Carrefour is
established only through its partners and franchisees for instance in Egypt or Japan. Thus
Carrefour is present in all the geographic areas of the world.

This report aims to analyze Carrefour’s marketing strategies in overseas markets, with a
partial focus on china. Recommended actions for future progress and failures will be
presented at the end of this report.

The report begins with an executive summary which explains the methodology used for this
report in section 1. Then the motives for the overseas expansion will be accounted for in the
Business description section. In the section 3 the general strategy of Carrefour group will be
analyze with a partial focus on the brand component and the brand personality. The section 4
deals with the market screening; this part shows the risks and the opportunities of the
Carrefour marketing strategies. The internationalization of the group Carrefour is treated in
the section 5 and especially the benchmarking with competitors. Then The Swot analysis, the
BCG matrix and other analysis are presented in the section 6 Analysis. The Carrefour market
mix analysis is introduced in the section 7. And finally conclusions and recommendations are
presented on the last section of this report. A portfolio of information sources and appendix
are in the end of the report.

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Section1: Methodology

To a large extent, this report is based on secondary sources mainly articles, company reports
and data coming from Datamonitor. These sources allow analysing the global food retail and
especially both the Asian and European food retail industry. In addition two interviews have
been made to illustrate the presence of Carrefour in china: the first one is an interview of a
former employee in Carrefour china and the other is an interview of a European manager who
has worked in Carrefour china. These interviews allow understanding the differences between
European and Chinese cultures and the challenge that represents the Chinese market for the
future.

Other information has also been obtained by lectures, other critical reports made by old
students and seminars in marketing, globalisation and business strategy.

Limitations:
Due to the lack of time and means, this report lacks of interviews and primary sources.
Moreover it was really difficult to find information about the Asian and Latin-American
markets.

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Section 2: Business description

In 1959, Carrefour was founded by two entrepreneurs Marcel Fournier and Louis Defforey.
Carrefour pioneered the concept of hypermarket, a large supermarket offering a large variety
of products and a department store under the same roof. They opened their first hypermarket
in 1962 near Paris in France. Gradually Carrefour has developed into a modern corporation,
thus improving its competitiveness and market presence considerably. Carrefour has
expanded steadily since 1969. Now it is an international supermarket group with a global
network of supermarkets across the world. It serves 2 billion clients per year in more than
7,000 stores which are present in 29 countries. 436,000 employees work for Carrefour. It is
not only the second but also the most internationalized retailer worldwide. It operates mainly
in the European Union, Latin America, and Asia but also in North Africa. In 1999 it merged
with Promodès one of its major competitors on the French market to form the first retailer in
Europe. Now Carrefour is:

• In Europe: Belgium, Switzerland, Romania, Spain, Greece, Italy, Poland, Portugal,

Turkey, France, Poland, Czech Republic, Slovakia. Carrefour is leader in Europe,
having established strong positions in 13 European countries.
• In Asia: China, Hong-Kong, Indonesia, Japan, Korea, Malaysia, Singapore, Thailand,
Taiwan. Carrefour was the first international retailer to establish a presence in Asia in
1989. The group is now present in 9 Asian countries and regions.
• In America: Argentina, Brazil, Columbia, Chile. Carrefour is the leading retailer in
Latin America, with a presence in the 3 largest countries in South America.

Moreover there are countries where Carrefour is established only through its partners and
franchisees: United Arab Emirates, Qatar, Santo Dominguo, Tunisia, Egypt, Oman, Saudi
Arabia, Japan, and Algeria.

Source : 2005 annual Carrefour report

French retailing giant Carrefour had 7196 (end of September 2006) stores. These figures show
that Carrefour has chosen to be internationally diversified. In 2006, Carrefour plans to

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accelerate organic growth by opening 1,000 new stores, including up to 100 hypermarkets.
The retailer expects to add a total of 1, 5 million square meters of floor space (euro-retail
flash, Management Ventures Inc).

The main focus of Carrefour is to understand the customer, to satisfy it and to offer the best
possible prices for high-quality products and services. For that Carrefour try to be active and
competitive in all types of retail distribution, primarily food retailing with;

The Carrefour hypermarkets offer a large range of food and non-food products (80,000 items)
at very attractive prices. Floor areas of hypermarkets range from 5,000 sq.m to 20,000.

The supermarkets offer a large selection of mostly food products, at very competitive prices,
in outlets featuring floor areas of 1,000 to 2,000 sq.m.

Hard discounters stock around 800 food products, at unbeatable prices, in small stores (from
200 to 800 sq.m). Half of the products are sold under the Dia brand name.

Convenience stores offer a range of products covering all food requirements and sometimes
they also offer services.

Cash-and-carry, wholesale and retail self-service, take also part from the services that has
Carrefour. This form of store offer mainly food products and intended for businesses.

Recently Electronic commerce becomes one of the new services that Carrefour offers: it is a
cyber-market where shopping can be ordered on the Internet and delivered to the door. Thus it
creates two cyber-shopping’s stores:

Carrefour strategy consists of building new format of store in each country in where it does
business and it expands the type of retailing best suited to the local market. It takes advantage
of the way their formats complement one another.

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Section 3: Market Screening: Political, Economic, Social and Technologic Analysis

A PEST Analysis allows analysing the international Marketing environment by determining

the macroenvironmental issues and the microenvironmental issues linked to the expansion of
Carrefour across the world. A PEST analysis shows the major influences on demand and
especially the attractiveness of these new markets.

1) Political issues:

The political-legal environment affects the country’s attractiveness. Legal barriers can stop
the expansion of the retail industry in some countries. Carrefour had to face to some legal
problems. In Asia, Carrefour had to take the legal considerations into account. Therefore it
chose to have local partners in China, Thailand and Taiwan. Carrefour had met numerous
problems with the local government in Beijing; this government did not understand the role of
Carrefour. That is why Carrefour had to be introduced by its local partner to explain what
Carrefour is. After that this government asked Carrefour to do something to modernize the
small retail business there. Thus Carrefour must cooperate with the local government. Even if
Carrefour tried to respond to the legal considerations, in 2001 the central government stopped
the Carrefour expansion, saying that Carrefour did not have the correct approvals from
Beijing. It was a difficult period for Carrefour because it had stopped its expansion for 18
months. After talks between the two parts, the government allows to Carrefour to continue its
expansion only if Carrefour opens new stores in small towns. Government pushed Carrefour
to open stores everywhere and not only in the big cities like Beijing. Ultimately Carrefour has
to respond to the government pressures.
Moreover Carrefour has to take the severe measures invoked by governments into account to
protect their domestic industries; for instance in India or in Thailand quotas limiting the
number of goods and new stores, special tax on imports, non-tariff barriers and product
legislation had been set up. Governments want to protect small local retailers from
competition of foreign-owned hypermarkets.

2) Economic issues:

One of the main issues which can determine the Carrefour’s choice of markets is the
economic opportunities and risks of each market.
First of all the emerging markets are growing faster: they offer a growth opportunity for the
Carrefour’s turnover. Moreover new segments and needs can emerge when the GDP per
capita increases; for instance mobile phones market is increasingly developed in emerging
countries. These markets have other numerous opportunities such as their high market size,
their high number of potential consumers. The Chinese population accounts for 20% of the
world population with 1,3 billion people and 71% of this people are between 15 and 64: they
can represent potential consumers. Therefore the Chinese market represents a great
opportunity. Carrefour can reap benefits of these big markets to make economies of scale in
terms of marketing, logistics, buying and labour costs.

Although these emergent markets are interesting, they remain risky. They have low income
per person, high rates of unemployment (9% in China and 10% in Brazil), volatile currencies,
high inflation rates (6,8% in Brazil) which means that in Brazil the prices are really unstable
and a high rate of their people live under the poverty line (22% in Brazil) which shows that
they are still poor countries. In addition they have a low GDP per capita: $8,300 in Brazil and
$6,800 in China which is really low compared to the GDP per Capita of the developed

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countries: in France $29,600 or in UK $30,100. These macroeconomic characteristics show
that the emergent countries stay countries in when it is risky to invest in the retail industry.
Besides these countries have already suffered from economic crisis such as the Latin-
American crisis in 2002 in where Argentina and other American countries have been affected
by a depressed economic situation with devaluation of local currencies and high inflation
rates.

Even if there are macroeconomic problems in these countries, all the retailers see these
countries as interesting markets which offer growth opportunities. Therefore different
competitors with the same strategies want to enter in these markets. This creates price
competition which is a new challenge that Carrefour has to win. In new emerging countries
the competing players are still small and not able to offer the same variety of products. For
global retailer these markets account for a mean to make high margin.
Undoubtedly these markets require investments. There are cost for entering, building a brand
reputation, attracting customers. However in these countries costs of personnel, land and
equipment are below industrialised countries.

3) Social issues:

Understanding the national culture is important if Carrefour aims to penetrate in new markets.
Thus Carrefour needs not only to understand the local population but also the local tastes and
needs. According to Kotler (1996), cultural barriers have to be identified before going in a
different country such as language barriers, local knowledge and local tastes. In china the
presence of two main religions (Taoist and Buddhist), the role of the family, the presence of
different ethnics groups (Han Chinese, Zhuang…) and above all the presence of different
languages in the same country (Mandarin, Cantonese, Shanghaiese…) are cultural barriers
which cause difficulties for the Carrefour’s enter in this new market. Moreover Carrefour has
to research the local preferences, the local values and the social influences such as the role of
the government, the religion, the family and especially the role of the media in the society.

Concerning the population, some of the emerging markets have the advantage of being
concentrated in big cities which cause high population density. As a result the costs of stores
and personnel are reduced when one supermarket serve a large number of customers.

4) Technologic issues:

These emerging markets have many problems of transport networks especially the Chinese
market which has a big size but not really efficient distribution networks. Jean Luc Chéreau,
the president of Carrefour China (2006) explains that Carrefour has met problems with the
china’s size because there were no networks for logistics systems: the highways and the
railways are not very well developed. For instance to receive or to send merchandise from
Beijing to Urumqi takes seven days by truck: that was a problem when there was fresh food in
the truck. Therefore Carrefour had to work with local distributors and had to continue using
national network. Besides tomorrow Carrefour would organize a platform and a network for
large cities like Shanghai. These technology requirements cause an increase of the
implementation costs.
Furthermore customers have not really cars in these poor countries; in China there is only one
car for 70 people. Carrefour must take these problems of distribution into account.

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Section 4: Carrefour strategy

1) Its position

The company is leader in Europe and second in the world.

In 2005: it opened 788 new stores and now it is present in 29 countries.

2) The competitors

Due to the lack of time, I will treat only two Carrefour’s competitors Wal-Mart and Tesco
whereas there are two other competitors especially in the European market: the Dutch
company Ahold and the German Metro AG.

Retailers such as Carrefour, Ahold are former retailers but now increasing rapidly are other
Western retailers such as Aldi and Tesco, each of whom operates in at least 10 countries.

Carrefour 51/60 Wal-Mart 53/60 Tesco 49/60

Their Leader in Europe and First and largest retailer Leader and largest food
position in its home market: worldwide (especially retailer in its home
France. It is the thanks to its leadership in market: the UK market.
second larger retailer its home market: the Leader in five Asian and
worldwide. Leader in united states). It serves European countries:
China and Latin 138 million customers Thailand, Czech republic,

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 America. The weekly in 16 countries. It
company recorded recorded total revenues
revenues of $104.6 of $312.4 billion during
billion during the the fiscal year ended
fiscal year ended January 2006. 10/10
December 2005.
Carrefour is only
about one-fourth the
size of Wal-Mart.
8/10
Their It is present in 29 The U.S. giant has a total
international countries. Carrefour of 6,447 outlets
portfolio derives more of its worldwide. It is present
revenue in 16 countries. It is not
internationally: 52% really present in Europe
versus 20% for Wal- only in the UK through
Mart. Carrefour is its subsidiary ASDA
more (currently 263 stores) and
internationalized and in Germany with 95
earlier than Wal-Mart stores (but local
and Tesco. 9/10 competitors such as Lidl
and Aldi cause problems
for its German
expansion). It is present
especially in the United
States. Wal-Mart stays a
home-region based
Multinational Company:
in the fiscal year 2005,
over 80% of sales were
in the U.S. whereas its
Chinese sales accounted
for only less than one
percent. Wal-Mart is less
experienced than
Carrefour in foreign
market expansion. 8,5/10
Their image/ Products at low prices High quality, products at
reputation with high value and lowest price and highest
quality added. value-added every day. It
Creation of friendly has a best corporate
atmosphere at every image than Tesco and
store. Carrefour is Carrefour because of its
especially price policy: “lowest
synonymous of high price every day” and this
quality. Carrefour is reputation enables it to
seen as a store which attract loyal customers.
understands local Moreover it is seen as a
differences and high-value added
preferences of its company. 9,5/10
South Korea, Slovakia
and Ireland. It posted
2005 sales of $65.2
billion. 7/10
It operates 2,318 stores
worldwide and 1,878
stores throughout the
UK. It is present in 13
countries especially in
European and Asian
countries; for example in
Hungary, Poland but also
in China, Malaysia, and
Thailand. But nearly 80%
of group sales and profits
come from the UK
business. It serves 15
million of customers per
week. It began in 1998 its
Asian expansion and it
has now 300 stores in
Asia.7/10
The Tesco policy is “to
create value for our
customers, to earn their
lifetime loyalty”,
therefore it aims to
develop value through its
own label. An innovative
and developed brand.
Very well trained and
helpful staff. Thus Tesco
is seen as a retailer which
sells a large quantity of
different products and
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 customers. 8/10 goods. But it is also
known for its sales
promotion “buy one get
one free”.8/10
Their Adopts a sales-driven It practices large Creation of new spaces,
strategy business model: price economies of scale to set extensions and a multi-
competitiveness, up its “every day low format approach. Tesco
choice, services, prices” policy. Wal-Mart has evolved a strategy
reliable brand, pushes its suppliers to based on 6 elements: be
rewards for loyalty. It provide the best product flexible, act locally, keep
enlarges its they can at the lowest focus, be multi-format,
assortments, adds possible price. develop capability
staff to the shop floor, It has its own (training staff…) and
re-launches its private transportation and build brands. The Tesco
label, develops logistics system. Wal- strategy aims to be as
loyalty programmes, Mart maintains lowest strong in food as in non-
mass advertising and price everyday and food. It aims to offer high
products and formats promises customer quality, great range, low
innovation with larger satisfaction. Wal-Mart prices and large services.
non-food area. emphasizes “lowest price It focuses its strategy of
Carrefour withdraws every day” to win the providing exceptional
from markets where it best corporate image. value and choice for
does not believe it 9/10 customers. 8/10
can become a top
three retailer: recently
Japan or Mexico.
Carrefour focuses on
“discount every day”
to attract customers to
buy impulsively.8/10
Their Carrefour enhances Wal-Mart offers a wide Tesco.com is a subsidiary
services/ service quality, range of services: offering a complete
differences product innovation, electronics, Financial online service including
develops private label Services, Pharmacy, tescodirect.com and
products and full Photo, Tires, Travel & Tesco.net. The company
range of choices for Vacations, Vision also offers a range of
both food and non- Centre, Jewellery, both online and offline
food products. Bookshop. 8,5/10 personal finance services.
Low prices, self- It is the first supermarket
service, free parking to implement successful
and especially internet
freshness are services shopping.Tesco.com is
present in Carrefour the largest grocery e-
stores and these retailer in the world
elements are the key Tesco a large choice of
of its success. 9/10 services: electrical, home
entertainment, clothing,
pharmacy, health and
beauty, seasonal goods,
travel agency, household

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Their formats Four formats,
different local brands.
A multi-format
approach. 9/10
goods, Telecoms and so
on. Tesco has also
launched in 1997 its own
banking services: Tesco
Personal Finance. 10/10
The company operates Four formats: Tesco
only through 3 formats: extra, Tesco superstore,
Neighbourhood markets Tesco metro (city centre
(traditional grocery locations) and Tesco
stores), Sam’s clubs express. Tesco adapts its
(goods are sold in bulk formats to the customers’
quantity) and discount needs such as the
stores (the Supercenter Carrefour approach. 9/10
with large format) 7,5/10

U.S. Wal-Mart and French Carrefour are rivalling with each other to expand Chinese markets.
However by joining with Chinese partners, adapting to local culture Carrefour has become the
biggest foreign retailer operating in China. Carrefour operates 79 stores in 32 Chinese cities
compared with 60 locations in 30 cities for Wal-Mart. Last year, Carrefour's sales in China
totalled 2.2 billion dollars, compared with 1.2 billion U.S. for Wal-Mart, official statistics
showed. In contrast to Wal-Mart’s internationalization strategy, Carrefour expands to foreign
markets faster and more flexible. Carrefour moved to other parts of Europe, America, and
Asia that accumulated herself with plenty internationalization experiences. Those experiences
enable Carrefour to win over Wal-Mart to hold leading position in emerging markets.
Although Wal-Mart does have 20% of their business outside of the USA, the majority of this
is derived from the successful Asda operation in the UK. Thus Wal-Mart appears to be
focusing on the USA for future growth. However, entering into developing countries later
than its European competitors could put it at a real disadvantage. Carrefour has not only
established a presence in these countries, including securing the best sites, it has also the
benefits of already understanding the markets, how they operate, and consumer buying
behaviour.

3) Carrefour’s objectives

Carrefour had established 4 priorities.

The priorities The means used to reach these priorities

Price repositioning and price
competitiveness: Improving the
price competitiveness of
hypermarkets in France and
winning market share.
Improving profitability and return
on capital employed for
international operations
Strengthening its position in key
Carrefour maintains a steady and determined
commercial policy to maintain low prices. It has
launched since 2005 a major price offensive.
Modernisation of the portfolio: Carrefour must
consolidate its position around the world through the
rationalization and optimization of its portfolio.
Carrefour sold non-profitable or non-strategic assets
(sale of Japan, Mexico, the Czech Republic, Slovakia,
closures of supermarkets in Spain and Brazil)
Tactical acquisitions in Greece, Poland and turkey and

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markets franchising agreement in France and Italy.
Development of loyalty programme.
Establishing the basis for faster Openings and expansions: The group aim to create 1
profitable growth million sq. m. to have more sales area, to accelerate
openings as from 2006 and to continue acquisitions
and extensions. It invests to enlarge and strengthen its
image by the expansion of floor area.
Reinvention of new store formats.
Set up of the multi-format strategy which offers to all
types of customers the widest choice.
The non-food area becomes more important in the new
formats.

4) The augmented product

We can notice that there are two ways to see the Carrefour augmented product. Therefore this
part contains two graphs. These elements allow differentiating Carrefour from its competitors.

The image/ the reputation the Brand the Value perception

Services store’s formats Before and

After sales services

Carrefour
hypermarkets

Warrantees
Guarantees

The Quality perception the employees the Corporate Image

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 Its own Label: Its
Carref
Its portfolio products
Its stores’ formats

Non-food areas Carrefour

Hypermarkets

Its competitiveness
Its image/ its Its strategy
reputation
Its services

5) Brand component evaluation

Carrefour uses the routes to competitive advantage as keys of success: first of all, it benefits
from productivity advantages because it uses economies of scale and its experience to have
lower costs. Secondly it benefits from value advantages: its products and services offer
greater benefit to customers.

The Carrefour services are really large: financial services, insurance, fuel, delivery at home,
travel agency, pharmacy, jewellery, flower shop, ticket agency, bookshop and phone services.
Thus various services may be attached or available.
Carrefour develops a multi-format strategy; this strategy permits to respond to all the market
segments. Carrefour managers understand the customers’ needs and changes and respond to
their expectations. That is at the heart of successful marketing.
Carrefour aims to develop its portfolio (see the internationalisation section).
Carrefour is seen as a quality retailer which provides value. However he has to repositioning
its prices to be also seen like a cheap retailer.
The Carrefour employees are really attentive to the customers’ needs, Carrefour has also
developed a before sales services: thus the Carrefour team offers to the customers free advices
in terms of nutrition, products and so on. The Carrefour staff policy is “we are here to help
you to better consume”.

6) Brand personality evaluation

The Carrefour brand is characterized by 6 key elements. All these elements permit to
differentiate Carrefour from its competitors.

an INNOVATIVE brand It develops new products, new stores and

new formats through innovation and
adaptation to the customers’ needs.
Carrefour takes the facts that the customers
change and their needs evolve over time into
account. The managers listen to customers,

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 observe their behaviour and understand their
environment in order to be able to respond to
their expectations.
Thanks to its capacity for innovation,
Carrefour may now cover all the market
segments.
New store’s formats allow penetrating target
markets. New concepts are born such as the
Carrefour Express based on mini-
hypermarket, the Urban champion which is a
response to a new type of customers who live
in town centres, do not have cars, are young
and always in a hurry (for instance, this store
has accommodated open hours: 9 a.m to 9
p.m) and Maxidia: a larger hard discount.
Carrefour continues the rebuilding of its
product range.
a VALUE brand A brand which respects its customers thanks
to the creation of the group’s quality
commitment: the group’s “satisfaction or
your money back” policy. Carrefour develops
three types of products’ ranges such as
Carrefour Agir which is a range that conveys
values because this range includes 3 product
lines: organic (300 products), nutrition and
fair trade.
Carrefour products are purchased for the
values that they convey.
Carrefour guarantees customers optimal food
safety.
a DIFFERENT brand A brand which is linked to its customers
thanks to the set up of the “Carrefour loyalty
programme”. This policy has met success
especially in France and in Spain: 30% of
French households are currently holders of
the Carrefour loyalty card, 5 million Spanish
customers have a Carrefour loyalty card.
Carrefour has developed this policy in
Belgium, Italy, Greece, Turkey since 2005
and since 2006 in China and Taiwan.
Moreover, Carrefour develops seasonal
renewal of assortments and product ranges, it
organises special events like the Chinese new
year…
Carrefour wants to show that it is an up-to-
date retailer. Therefore it has set up
personalized credit (in Italy or Brazil for
example and in china since this year) or it
offers the possibility to make your own
Compact Disc.

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a SECURE and RESPONSIBLE brand
a LARGE brand
An ATTRACTIVE brand: good quality at
relative low prices.
Carrefour develops often a catalogue in
where all its products are. He has also an e-
magazine which helps people to better
consume and eat.
Its products convey values.
Organic clothing has been available since
2005: these innovative products are made
from cotton grown in accordance with the
standards of organic agriculture.
Carrefour protects its customers and the
environment thanks to its continuous
anticipation of risks (traceability of
products). It provides to customers the
quality of information. It fights against
obesity (by the launch of the Carrefour agir
range), it gives nutritional advices to help
customers and the food safety is an absolute
priority for it. The group was the instigator of
“nutritious days” organized in several
countries; these days help to promote all the
right reflexes with regard to nutrition.
Carrefour protect environment by reducing
energy emission for example or developing
recyclables. It works with agricultural sector
to its Carrefour’s sustainable environment
policy and it plays an ethical and social role:
it offers satisfactory working conditions for
its team.
Carrefour develops not only food product
ranges but also non-food ranges to increase
its stores’ power of attraction and to offer a
wider range of services to serve its customers
better. Carrefour sets up areas for organic
products, health food products, fair trade
products and upmarket products.
For example Carrefour hypermarkets offer a
wide range of men’s, women’s and children’s
clothing and shoes.
Carrefour aims to improve its price
positioning and its price image. It wants to
increase price attractiveness for non-food
items; for example: telephone products,
textile products, electronics… Moreover
Carrefour guarantees the quality of its
products and shows it by its “satisfaction or
your money back” policy. Rigorous quality
controls are present.
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Section 5: The Carrefour’s expansion around the world

1) Motives for the international expansion

Today the French food retail market becomes increasingly saturated: the growth is limited, for
Carrefour there are no more opportunities to develop the growth in its domestic market. Its
domestic market is become too small, too saturated, with a limited growth and above all very
competitive. Kotler (1996) explains that a limited domestic growth and/or an intense domestic
competition is/are a key reason why firms enter foreign markets. Therefore Carrefour has
chosen to turn to other geographical markets to find new opportunities of growth and to
develop an aggressive international strategy in the emerging markets such as the Chinese
market. However it has to be careful because its competitors (especially Wal-Mart, Ahold and
Tesco) have the same objective than it i.e. to conquest these new markets.

Emerging markets are becoming so attractive; they are growing faster. According to the 7th
Annual IGD Conference on Global Retailing (13th of June 2006), changes for the future
(2030) must be taken into account:
- economic mass will shift from Europe to Asia, the merging world will become more
important
- the emerging countries will become more dynamic and will catch up with G7 in terms
of purchasing power
- China and India will be the two emerging giants.

Moreover according to Adam Cross (in Jenkins, 2006) there are two kind of market forces
that can turn a company into a “market seeker”: firstly the “push” factors are defined as
“forces at play in the retailer’s home market that create pressure for it to consider overseas
markets” thus the retailer has reached the saturation point in its domestic market. Secondly
“pull” forces are “factors operating outside the domestic market that act to attract a retail
chain into considering expansion into that market”. The most recent example is China which
has opened its market to the non-national companies only since 2001.

18
2) Carrefour International strategy

Steve Barnes, IGD business director, has shown during the 7th Annual IGD Conference on
Global Retailing (June 2006) that there are three main ways to win in these markets; by
adapting its formats and its products to the local markets, approaching the market with
flexibility and introducing innovation. Carrefour has set up this strategy with success
especially in Asia. Carrefour is become a giant retailer with 7,030 stores worldwide. Since
2005 the group has announced a reorganisation of its overseas presence by sales and
acquisitions. For instance not only in February 2005 it announced the acquisition of 12 Polish
hypermarkets from one of its main competitors Ahold, but also in March 2005 it signed a
partnership with Aeon Japan in which Carrefour sold eight hypermarkets to its Japanese
partner and the use of the Carrefour brand in Japan and the right to sell Carrefour private-label
products in Japan.

Although Steve Barnes sees the demand for modern retail as an opportunity for China, India
and Russia, he has also identified common challenges and issues that all retailer must take
into account to go in these markets: the traditional trade still plays a key role; but there are
problems of bureaucracy and infrastructures.

3) Carrefour around the world

Carrefour has to not only understand each national culture but also the staff which is the
primary interface between its business and its customers in order to be able to penetrate new
markets. Other factors need to be carefully managed: the local legislation (labour laws…).
Understanding really the ways of living of these people is important: for example sales
promotions “buy one, get one free” did not work in Japan because the majority of Japanese
homes lack storage space and in general the Asian homes lack of domestic refrigeration.

2005 Operating Statistics:

Total sales: 75,5 billion euros, an increase of 2,5 % over 2004.
French operation sales fell 0,4 % to 35,6 billion euros.
European operations (excluding France) increased 3,6 % to 28,1 billion euros.
Asian operations increased 12,6 % to 5,7 billion euros.
American operations increased 7,5 % to 5,1 billion euros.
Source: Euro-retail flash, management ventures Inc.

In 2006, Carrefour plans to accelerate organic growth by opening 1,000 new stores, including
up to 100 hypermarkets. The retailer expects to add a total of 1,5 million square meters of
floor space.

A-Europe

The European food retail industry is the world’s most lucrative. It accounted for in 2005
37,6% of the global industry’s revenues. Moreover it generated in 2005 total revenues of
$1,102 billion (Datamonitor). The emergence of higher-value products such as organic food
and the development of new emerging economies like Poland are expected to boost the
industry and the growth.

19
Carrefour is leader in Europe. The group is present in 13 European countries with a
competitive landscape dominated by domestic companies such as Tesco, Schwarz Group and
Aldi. The French market is dominated by Carrefour which generates almost 50% of its
revenues in France. He has launched an aggressive price-cutting campaign using its own label
brands. Carrefour is not present in the UK market because it is already a very competitive
market which is dominated by the big four: Tesco, Sainsburys, Asda/Wal-Mart and
Morrisons. The introduction of Wal-Mart and its considerable economies of scale through the
acquisition of Asda have added pricing pressure to the UK food retail marketplace.

The retailers and especially Carrefour must stay competitive by cutting prices in response to
the high level of competition within the industry. Nevertheless many of the West European
markets are highly mature; this means that demand is relatively stable. Therefore in these
kinds of stagnating markets, competition has intensified and much of it has concentrated on
price. In order to reduce their costs and generate additional revenue, companies have
developed (especially Tesco and Carrefour) online retailing. But this trend did not work very
well in France whereas it is a success in the UK market. The discount sector has been the
most dynamic area of the European food market in recent years and is continuing to expand at
an impressive rate: hard discount leaders Aldi and Lidl continue their aggressive expansion.
Face to these hard discounts, Carrefour had set its soft discount format (which is called ED).

B-Latin America

Carrefour is the first operator in Latin America with a presence in 3 great emerging
economies: Brazil, Argentina and Colombia. Carrefour is active in 3 retail formats:
Hypermarkets, supermarkets and hard discounters. But the extremely unstable economic
situation of these markets can spark off the decline of the Carrefour’s expansion in Latin
America. The economic crises which have touched recently these countries have boosted
Carrefour not to be more present in Latin America and rather to invest in Asia.

C-Asia

Carrefour was the first international retailer to establish a presence in Asia in 1989, with a
presence in 6 countries. Now the group is present in 8 countries. The Asia-Pacific food retail
industry is become an increasingly attractive market in recent years. The increase in
disposable personal incomes and increasingly busy lifestyles in developing nations such
China and India have contributed to rapid growth of their food retail industries. By 2010,
according to the 7th IGD 2006 annual conference about global retailing, China is expected to
replace Japan as the leading contributor to the regional industry's value.

Asia-Pacific is the second largest market in the global food retail industry, accounting for
34.2% of overall revenues. The emergent economies will be the key growth drivers. Moreover
the arrival of foreign competitors has allowed the development of many food retail industries
in the Asia-Pacific region. Yet the environmental and cultural factors are playing an
increasingly significant role in the more developed Asia-Pacific food retail industries. Health
foods continue to grow in popularity in many Asia-Pacific markets.

20
China:

China is Asia’s second biggest retail market after Japan. China's population of over 1.3 billion
and its rising levels of disposable personal income - among the salaried classes at least – have
boosted food retail growth in the country. The major international players have not been slow
in identifying the opportunities this climate enables. The two largest chains, Wal-Mart and
Carrefour are both pursuing rapid expansion in China in an effort to solidify their regional
presence: Carrefour has recently stated its intention to open ten new stores in China every
year and Wal-Mart is currently engaged in a $1 billion-plus auction for China's Trust-Mart.
Any retailers attempting to penetrate the Chinese market will need to be sensitive to the
demands of local consumers. Wal-Mart and Carrefour has already worked in partnership with
Chinese retailers due to the competitive advantage offered by local knowledge. One factor
already working in Wal-Mart's favour is its low cost image, which could be important to its
success: China remains a price conscious market, despite the emergence of an increasingly
affluent - but limited in number - middle class.

According to the Commerce ministry (BBC, 2006), Carrefour sales in China rose by 25% in
2005: making it china’s ninth-biggest retailer by sales. Carrefour increased the number of its
stores in China to 78 last year. But despite the growth in foreign investment, Chinese retailers
remained dominant in their home market.

Moreover the 30th October 2006, Carrefour opened its 1000th overseas hypermarkets in China.
This store, which is situated in Tonghzou near from Beijing, is the seventh in Beijing.
Carrefour has opened its first Chinese hypermarket in 1995 and now it is present in 32 cities
and the group is the first international retailer in China. It has 188 million of Chinese
customers and its 2005 turnover was about $2 billion. Thanks to the increasingly Chinese
purchasing power and a Chinese Growth Domestic Product (GDP) which has increased by
10%, Carrefour has succeeded to have a strong and steady growth. Therefore the company
continues to build outlets in this interesting market.

However the non-national companies are bothered by the local government and partners (such
as Chinese wholesalers). Carrefour had to adapt continually its strategy according to the local
authorities. Today these authorities seek to develop western regions less economically
developed than the coast. Carrefour must invest in these underdeveloped regions in order to
can continue to build new stores in big cities like Beijing or Shanghai because it is these

21
authorities which permit the building of new stores. For the Carrefour president J. Duran (in
Lauer, 2006), the main priority in china is to reinforce the zones in where the group is already
present to benefit from large economies of scale. Thus Carrefour has to take care of its former
stores which represent the base of its future growth face to the development of its main
competitors the American retailer Wal-Mart and the British retailer Tesco.

Yet the growth brings about new issues especially in terms of human resources. The company
has already 40,000 employees in china and it recruits each year 10,000 employees. This
causes problems of training. In addition, in some regions there is one car for 70 people.
Therefore Carrefour has to manage a free transport service for its customers.

What about India?

The Indian food retailing industry is also witnessing rapid growth, even though small
neighbourhood stores currently account for the majority of revenues due to foreign direct
investment laws currently in place to prevent foreign players from owning a majority share in
a food retail chain. Despite these restrictions, the Indian food retail industry is attracting
growing interest from Wal-Mart and Tesco: both have been linked to a possible food retail
joint venture with the Indian telecoms conglomerate Bharti Enterprises. Carrefour has not yet
begun its Indian expansion due to the legislation.

D- The former countries

Czech Republic and Slovakia: Carrefour has opened its first store in 1998 in Czech Republic
and in 2000 in Slovakia. In September 2005 Carrefour sold to Tesco 11 stores in the Czech
Republic and 4 in Slovakia. Tesco paid €57.4 million and its stores in Taiwan.
Japan: In 2005, Carrefour sold its 8 hypermarkets but announced a partnership with Aeon
Japan.
Korea: In 2006, Carrefour is selling its 32 hypermarkets to E-Land.
Mexico: In March 2005, Carrefour sold its 29 hypermarkets to Chedraui.
Chile: Carrefour sold its 8 hypermarkets in 2004 to D&S.

22
Section 6: Marketing Analysis

1)SWOT Analysis

As the second largest retailer in the world the company enjoys a strong brand image and
economies of scale yet the company has seen stagnating sales in its domestic market of France
in the last year.

Strengths:

Market leader: Carrefour’s leadership position in its three primary store formats helps the
company maintain an advantage in the competitive retail market.
Aggressive marketing and adaptable business model: Carrefour concentrates on sustainable
local development: it trains its workforce in order to be able to conform to the local market.
Its retail formats are easily adaptable in its various markets. The company has time and again
the ability to adjust its retail formats according to the particularities of the different market,
and this, coupled with its aggressive marketing ability, has helped the company grow in new
markets.
Brand recognition: Product positioning is planned in each of Carrefour’s stores and this has
ensured good brand recognition in all markets in which it operates. Carrefour operates its
stores under 17 banners. The company can boast of 90% brand recognition rate, with its own
branded products accounting for 18% of its worldwide sales. The brand salience for the
company is high.
Focus on competitive prices: In each of its store formats, Carrefour maintains a strong focus
on competitive pricing. In the hypermarkets segment, over three quarters of the company’s
stores offer the lowest or the second lowest prices versus their local competitors. Carrefour
focuses on offering competitive prices to customers.

Weaknesses:

Stagnant sales in France: France, Carrefour’s largest geographical market, accounted for 48%
of the total revenues in the fiscal year 2005. However revenues from this market grew by a
mere 0.1% during 2004. This is largely because Carrefour has a relatively poor pricing image
in France.
Losses for Ooshop.com: Carrefour operates its online shopping business, Ooshop.com, in
both France and Spain. It is estimated that the business has accumulated losses in excess of 17
million euros in 2004. In times when internet shopping is gaining popularity, the company’s
inability to profitably run Ooshop is a burden on its bottom-line.

Opportunities:

Strong growth potential in Asia: Given the high population in Asian countries and growing
local demand, there is considerable growth opportunity for the company in the Asian region.
New stores: Carrefour bought 26 stores in Greece from Xinosin in July 2004. The company
also acquired 12 hypermarkets in Poland. Moreover in 2005, the company has opened 14 in
Brazil, six in Colombia, five in Indonesia and three in Thailand. These new stores should help
the company attract a larger number of customers and boost revenues.

23
Threats:

Stiff competition from discount retailers in France: Carrefour prides itself on its focus on
price competitiveness. However, due to these discount retailers the company is suffering from
a poor price image in its domestic market. There are increasing labour costs in Europe:
Europe (including France) is the primary market for Carrefour, accounting for almost 85% of
the company’s revenues. An increase in labour costs in its most significant market can
adversely impact Carrefour’s bottom-line.

2)The BCG Matrix applied to Carrefour

Carrefour domestic market, France, has been able to serve as a cash generator for financing
overseas expansion. Thus Carrefour uses its core business to finance its international strategy
and to invest new policies.
The role of the French market as a cash-flow generator for the overseas markets can be seen
in the BCG-matrix. The French business acts as a cash cow transferring money to emerging
markets in the hope of turning them into stars.

Stars: Question marks:

Asian emergent markets especially China, are characterized by new emergent markets
Taiwan and Thailand. which need a particular strategy such as in
New European markets such as Greece, Colombia or in Malaysia.
Poland and Turkey.
Latin-American markets: Brazil and
Argentina.

Cash cow: Dogs:

Former European markets such as France, Japan, Mexico, Czech Republic and
Belgium, Spain and Italy. Slovakia.

Stars: Stars consume and need cash flow. They concentrate the resources. Carrefour must
invest massively in these markets to be the leader by acquisitions, enlargements of stores and
new marketing strategies.

Cash cows: Cash cows are the stars of yesterday and they are the foundation of the company.
They represent mature markets. Carrefour want to maintain its position in these former
markets but it minimizes the investments and uses rather the cash flow generated by these
markets in order to invest in other promising markets such as the Chinese market. Carrefour
aims for a market leading position to enable economies of scale in logistics, buying and
marketing.

Question marks: question marks demand high cash investments. They need cash flow to
improve market share or to withdraw rapidly. Carrefour needs to understand, identify the
needs, demands of these particular markets. It has to provide, communicate by using the best
means and deliver customer value. Carrefour must choose the best tools to communicate the

24
value. The goal is to identify the customer expectations, to fulfil the customer needs by this
mean, Carrefour creates customer satisfaction and as a result it creates customer loyalty.
Carrefour is able to turn question marks into stars by investing massively.

Dogs: Carrefour aims for minimizing the number of dogs since 2005 by selling stores. It
makes both mistakes of strategy and investments: it fails to understand these markets. It
doesn’t use the best way to attract the customers and to penetrate these markets (Korea,
Japan).

25
Section 7: Marketing Mix

As the second largest retailer worldwide, Carrefour has to be modified and adapted its
marketing mix to foreign markets. Within each new market, it must find a combination of
marketing environment and target markets that are different from those of its own home
country and other foreign countries. Thus it is important that in international marketing,
pricing, product, place and promotional strategies be adapted accordingly.

1) Price

“Price leadership remains a top priority”, José Luis Duran, chief executive, said. This
quotation can summarize the Carrefour’s price policy. Carrefour has chosen to penetrate
emerging markets, all characterized by a low GNP per capita. This implies that for these
emerging markets price is a key competition factor. Thus the competitive landscape motivates
a low-price strategy.
In order to succeed with a low cost strategy, the cost has to be minimised. Carrefour aims for
market leading positions in each of their overseas markets in order to be able to make
economies of scale. Moreover it develops a pricing strategy called Every Day Low Prices
(EDLP). In every country, consumers are becoming more price conscious. Therefore
Carrefour has moved since 2005 to an EDLP type model which allows increasing sales
volumes and costing savings. Efficiency savings are constantly sought in order to reduce cost.
Consequently Carrefour is focusing on improving its back- and front-office operations and in
particular on the following areas: Supply chain, sourcing, productivity, marketing and reduced
property costs.

Carrefour’s Hypermarkets: Moving towards an EDLP-Type Model

Source: IGD Research

Furthermore in order to attract customers when Carrefour enters new markets, it develops
another pricing strategy: promotional pricing. Promotional pricing is often practised when
entering a new market in order to attract the new customers. (Kotler, 1996)

In 2006, Carrefour aims for cutting prices especially in France to compete with its rival. Like
other French retailers, Carrefour has been affected by weakness in consumer spending caused
by increasing fuel prices and an increasingly unemployment rate. That is why Carrefour wants
to stay a price leader in Europe.

26
2) Product

In rapidly developing economies, such as the emerging markets of Asia and Latin America,
there is a continuing trend towards large scale retail development. (Kotler et al, 1996)
Carrefour’s stores are focused on offering a wide variety of products including food as well as
non-food products. Moreover in emerging markets, customers would rather do their shopping
at Carrefour than in other small local stores because Carrefour’s stores are attractive as
regards to freshness and hygiene. Carrefour adds value by offering a large variety of products,
all under one roof, in a store having a designed outlook for quality.

The company chooses to develop a varied product mix to respond more closely to customer
expectations for instance areas of textile products, electronics and household appliances.
Furthermore the best-selling brand in Carrefour hypermarkets is the Carrefour brand itself.
The Carrefour products ensure quality and value rather than simply a cheaper alternative to
branded products. Thus Carrefour products are purchased for the values that they convey.
Carrefour own label can be a way of creating profile and enhance customer loyalty. Carrefour
stores feature three ranges listed in ascending order of price. The main range is Carrefour,
Agir and selection (80% of the product offering) which is immediately recognizable by their
packaging and their colour code. This range embodies the group’s quality commitment.

Moreover to succeed in the new emergent markets, it is vital to produce a more local offer and
thus to adapt its products’ ranges in each new countries in order to offer a variety of goods
that local people want (Child, 2002). Cultural differences as regards to different tastes are
important factors which must be accounted for (Challinor, 14/11/2006). It is important to keep
abreast of changing local customer tastes in their new markets in order to stay ahead of the
competition. Thus Carrefour adjusts its stores in each nation where it enters. Carrefour has to
be able to understand these environments to building a successful international retail brand.
The failure of Ikea in Japan shows the importance to understand the local ways of living
(Challinor, 16/11/2006)

3) Place

Choosing where to locate its stores is a key aspect for retailers. Thus Carrefour has to take
purchasing power, population density, competition and infrastructures into account.
Local infrastructures and site accessibility are also factors which affect location decisions. In
china and in other emerging markets most local infrastructure is still underdeveloped with
poor roads and transport networks. An adequate access is a key for a successful
implementation. Carrefour chooses to locate its stores where the population density is high.
As a result it implants its stores in the city centre or near from the city centres for example in
China Carrefour emplaces its stores around Beijing. It tries to be located where customer
traffic is high.

Since 2005, Carrefour has chosen to be focused on a new kind of format: the convenience
stores. Convenience retailing forms an increasingly important part of Carrefour’s multi-format
strategy in Europe and beyond. They are present in Belgium, Italy and Greece. In Thailand,
Carrefour is testing a convenience format in partnership with shell to increase small store
format and to respond to the new Thai legislation.

27
4) Promotion

A promotion mix consists of a specific blend of advertising, personal selling, sales promotion
and public relations aiming to persuade potential consumers to buy a product. As discussed
earlier the key to build a successful retail brand across borders is the ability to understand
local differences and then to understand what drives customer loyalty in each geographic
market: the price, the service, the design, the quality, the brand, the value or the affinity.

Carrefour has chosen mainly three aspects: the price, the quality and the service. It uses
several ways to attract potential consumers: for instance in China which is a country in which
there is only one car for 70 persons, Carrefour sets up a free transports’ network characterized
especially by a free shuttle service for its customers. It uses also sales promotions and it offers
tasting of numerous products in order to permit to people to choose what they really want. It
has chosen to develop the hypermarket format in Asia and especially in China because
according to the marketing research, it has noticed that Chinese would rather make shopping
in a big store in where they can find a large variety of goods.

Furthermore in Chinese, Carrefour is translated by “charefou” which means “happiness and

prosperity” for the family. That is why Chinese people appreciate the symbol of these stores.
Carrefour develops also a “Carrefour loyalty program” associated to a Carrefour loyalty card
to serve the customers better and to respond to their expectations.

In addition Carrefour creates a particular policy in each country where it is: the “satisfaction
or you money back” policy. This policy shows that Carrefour can ensure the quality of its
products; it is a proof of confidence.

To attract more customers, Carrefour develops new promotion mix; for example there are
seasonal renewals of assortments and product ranges, it organizes special events, special
weeks with one theme such as the Fair trade or Christmas weeks. It offers a full range of
products at cheap price during special promotional campaigns.

5) Personnel

Carrefour develops one policy concerning the personnel; its employees have to meet
customers in person. Thus they are able to better understand the customers’ needs.
Consequently Carrefour employs local managers and local workforce who are able to
understand the local habits more than expatriates. These local employees are able to better
advice the consumers. Carrefour develops a human resource policy: it develop recruit and
train local people.
For instance in china 99% of the workforce is Chinese people. “We created the Carrefour
china institute in 2000 in order to train mainland Chinese staff to take positions of
responsibility. And thanks to that, we have a lot of very good Chinese people today”, the
president of Carrefour china said (2006). Moreover “it was a good, smart advantage that our
main multinational competitors didn’t have”.

28
Section 7: Concluding remarks and recommendations for the future

One of the main Carrefour’s objectives is to continue its international expansion by

strengthening its corporate image and adding sales area worldwide. As the second largest
retailer around the world, Carrefour has endeavoured to respond to the customers’ needs and
to understand the different cultures and tastes. Therefore it has a successful expansion in the
emergent economies and especially in the Chinese market.

Despite this international success, Carrefour must not forget its French domestic market in
where its price image needs still to be improved. Thus in 2007, one of the targets of Carrefour
is not only to improve its price positioning but also to stay seen as a high added-value
company.

Moreover although Carrefour’s expansion in these emerging markets offers growth potential,
it also exposes the group to possible crisis such as the Latin-America crisis which has affected
the Carrefour stores. Consequently it is well-judged to stop investment and expansion into this
region until the economic conditions will be improved.

Markets with relatively stable economies can be considered as targets for the future. For
instance an expansion into china offers numerous advantages even if Carrefour has now to
compete with international strong retailer like Wal-Mart or Tesco. Carrefour can also turn into
the Indian and Russian markets which represent the future giants. Many challenges lie ahead
global retailers, there are considerable opportunities. The potential of India is one of these
opportunities: when the restrictions on foreign direct investment are relaxed, it would cause
an influx of foreign retailers to this $194 billion high-potential food retail market (IGD,
12/12/2005). There is also the potential of the new European members.

Thus in over 30 years of global experience, Carrefour has been confronted with great
challenges. With its strategy it has solved its problems and maintained an outstanding position
within the retail business until now. However Carrefour will have much more challenge in the
future owing to the emergence of national retailers like Tesco or Metro. Moreover Carrefour
has now to be confronted to the acquisition by Wal-Mart of the Chinese retailer Trust-Mart.
This acquisition has considerably changed the competition’s landscape in China. Wal-Mart
has ambition to threaten Carrefour’s global expansion.

29
Bibliography

Interviews:

Miss Christelle Alcuta, a former employee in Carrefour China, Beijing, China.

Miss Malika Amara, a customer in Carrefour France, Paris, France.

• These two unstructured interviews allow understanding the cultural differences

between the Asian and European tastes and needs.

Newspapers:

Child, P (2006) “Lessons from a global retailer: An interview with the president of Carrefour
China.”, The McKinsey Quarterly, 2006 special edition
• This article which is in fact an interview with the Carrefour China president enables to
understand the problems and the experiences of Carrefour in Asia and especially in
China.

Couch, A (10/03/2006) “Carrefour to build stores and cut prices”, International Herald
Tribune
• This is based on the Carrefour’s objectives for 2006

Datamonitor (May 2006) “Global-Food retail”, Copyright Datamonitor 2006 ©

• This analysis permits to have a large approach of the global food retail market.

IGD, (25/04/2005) “Carrefour Q1 results set the scene for 2005”, Copyright IGD 2006 ©
• This article explains the Carrefour main objectives for 2006 and the results for 2005.

IGD, (16/05/2005) “Convenience more important for Carrefour”, Copyright IGD 2006 ©
• This article explains that the convenience format is become profitable for the group.

IGD, (28/06/2005) “How is Carrefour’s operating model evolving?”, Copyright IGD 2006 ©
• This article shows how Carrefour makes to cut its prices.

IGD, (12/12/2005) “IGD’s ‘Top ten of global Retailing’ 2005”, Copyright IGD 2006 ©
• This article explains the main opportunities that the retailers in 2006 can met.

James, B (31/08/1999) “Carrefour is acquiring Promodès to create a European Powerhouse:

Two giants in France join to fight Wal-Mart”, International Herald Tribune
• This article explains the merge between Carrefour and Promodès.

Reuters, The associated press (28/04/2006) “Carrefour quits Korea”, International Herald
Tribune
• This analysis permits to understand the reasons of Carrefour for quitting Korea.

Visseyras, M (30/10/2006) “En chine, Carrefour ouvre son 1000eme hyper”, Le Figaro
• This is a French report about the opening of the 1000th hypermarkets in China.

30
Journal:

Breese, A (October 2001) “Grocery retailing – is it globalising?”, The INTAGE Global

Services, Vol. 4
• This article analyses the effects of the globalisation on the retail industry and
especially on Wal-Mart and Carrefour.

Internet pages:

BBC News Business (10/12/2006): http://news.bbc.co.uk/1/hi/business/default.stm

• There are two articles about Carrefour’s international expansion:
“Carrefour boosts China presence” and “Tesco and Carrefour to swap shops”.

Carrefour Hypermarket in China and Italy: http://www.carrefour.com/cn and

http://www.carrefour.com/it
• Web pages very useful to find advertisements

Carrefour France-press releases (10/12/2006): http://www.carrefour.fr/revuedepresse

• Carrefour’s press releases

Carrefour France supermarket: http://www.carrefour.fr

• Carrefour’s France home page containing among other things company information
and year reports.

IGD: http://www.igd.com
• This web-page gives facts and information on all aspects of the food and grocery
industry.

The world fact book 2006: http://www.cia.gov/cia/publications/factbook

• This is an on-line publication of CIA’s which contains facts and figures about
different countries in the world.

Books:

Kotler, P (1996) “Principles of Marketing”, European edition, Prentice Hall

Bradley, F (2003) “Strategic Marketing in the customer driven organisation”, Chicester, West
Sussex, Hoboken: J. Wiley

Lhermie, C (2001) “Carrefour, or the invention of the supermarket”, Vuibert

Hill, E and T, O’Sullivan () “Marketing”, 2nd edition, Longman modular texts

Kotler, P and K. L. Keller () “Marketing Management”, 12th edition,

Company reports:

Carrefour annual report 2005

Tesco annual report 2005

31
Wal-Mart annual report 2005

Lectures and seminars:

Challinor, S (fall term 2006) “ACE 3002, Strategic Marketing”, University of Newcastle upon
Tyne

McGovern, T (fall term 2006) “BUS 3002, Business Strategy”, University of Newcastle upon
Tyne

Conference Review:

IGD: Global retailing, 7th annual conference London, June 2006, reviewed by Nicoletta
Occhiocupo

IGD: Wal-Mart and Carrefour as Home-region multinational by Alan M. Rugman et al.

Copyright European retail digest ©

32
Appendix 1: Carrefour Chinese advertisement

33