Carrefour Case Essay

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Pages: 16

Carrefour’s Misadventure in Russia

On October 15, 2009, just four months after opening its first store in Russia, France-based Carrefour SA (Carrefour), the second largest retailer in the world, announced that it planned to exit the Russian market. The company announced, “Carrefour has decided to sell its activities in Russia and pull out of the market, given the absence of sufficient organic-growth prospects and acquisition opportunities in the short- and medium-term that would have allowed Carrefour to attain a position of leadership. This decision is consistent with the Group‟s strategy which aims at building leadership positions that will ensure strong and lasting profitable growth.”

Carrefour started the
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Carrefour operated through franchises in the UAE, Saudi Arabia, Oman, Qatar, Egypt, Tunisia, Algeria, and the Dominican Republic. In 1998, it acquired Comptoirs Modernes SA, which brought 790 supermarkets into its fold. In 1999, it acquired Promodès SA12, which owned several hypermarkets, supermarkets, convenience stores, and discount stores. The acquisitions helped Carrefour become the top retailer in Europe by the late 1990s.

As of 2008, Carrefour was the second largest retailer in the world and the largest retailer in Europe (Refer to Exhibit II for the list of global powers of retailing). By the end of 2008, it was operating 15,430 stores globally. It operated through different store formats like hypermarkets, supermarkets, convenience stores, hard discount stores, and cash & carry outlets (Refer to Exhibit III for Carrefour‟s store formats). Carrefour‟s revenues were at € 108.629 billion for the year ending December 2008 (Refer to Exhibit IV for Carrefour‟s country wise sales).

In every international market in which Carrefour operated, it essentially focused on becoming one of the top three players in terms of market share. Commenting on the criteria for entering new markets, the Chairman of the Management Board of Carrefour, José Luis Duran, said, “We‟ll look toward new markets. That means local acquisitions in countries where we