Carrefour Tests `Planet' Store Format in France as It Bids to Boost Sales
Carrefour SA, the world’s second- largest retailer, opened two pilot Planet Carrefour superstores in France today as it aims to revive the format and spur sales in western Europe.
“We aim to reinvent the hypermarket concept,” Chief Executive Officer Lars Olofsson told reporters late yesterday at a presentation for one of the stores outside Lyon, France.
The Paris-based retailer is trying to rework the superstore, or hypermarket, format as part of a strategy to cut prices, sell more of its own products and invest in discounts and advertising to boost its image and market share. Revenue growth at Carrefour’s European superstores has stagnated as consumers buy groceries closer to home or opt for department and specialty stores for apparel and beauty products.
Sales at Carrefour French hypermarkets open at least one year increased 0.8 percent in the second quarter, the company said last month. That lagged a 2.6 percent gain in the retailer’s overall same-store sales in the country. Excluding France, which accounts for 43 percent of total revenue, Carrefour’s same-store sales in western Europe fell 4.9 percent.
Before designing the Planet Carrefour concept, the company interviewed 50,000 households, asking consumers what they like and dislike about its hypermarkets and focusing on what they say they can’t find in the stores, Olofsson said.
Sushi, Babysitters
The new stores have more aisle space, clearly delineated product zones and more floor space for categories like frozen and organic foods, beauty, and fashion, Olofsson said. The pilot store in the Lyon suburb of Ecully also has a sushi bar and offers free babysitting.
“We’re choosing areas where we think we can be different and unique for our clients,” Olofsson said. “Seventy percent of the time they’re mothers with kids.”
The company plans to open five Carrefour Planet stores this year, including one in Belgium, which opened in April, and two in Madrid, the first of which opened in June, Olofsson said. The second French pilot store will be in Venissieux, also outside Lyon. Carrefour is “very encouraged” by the initial results, the executive said. Fashion sales at the revamped hypermarkets are up 30 percent.
Carrefour plans to fine-tune the concept over the coming months and roll out a final version in its largest hypermarkets next year, the CEO said. The retailer will provide more financial details at an analyst presentation on Sept. 16.
Southeast Asia Exit
The retailer is shifting its international focus to markets where it can be a leader, such as Latin America and China, Olofsson told shareholders in May. The retailer plans to exit Singapore, Malaysia and Thailand and is seeking offers for its operations in the Southeast Asian countries, four people familiar with the matter said in July.
The company has approached potential buyers and may ask for bids by early September, said two of the people, who declined to be identified because the sale process isn’t public. The combined operations may fetch $800 million to $1 billion, they said. Olofsson declined yesterday to comment on the matter.
To contact the reporters on this story: Andrew Roberts in Paris at aroberts36@bloomberg.net.
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