Asia Pacific will be instrumental in Carrefour's future growth, says IGD

Citation

(2003), "Asia Pacific will be instrumental in Carrefour's future growth, says IGD", International Journal of Retail & Distribution Management, Vol. 31 No. 9. https://doi.org/10.1108/ijrdm.2003.08931iab.001

Asia Pacific will be instrumental in Carrefour's future growth, says IGD

Asia Pacific will be instrumental in Carrefour's future growth, says IGD

Keywords: Retailing, Grocery, Carrefour, Asia

IGD estimates that by 2006 the Carrefour group could increase its store numbers by 29 per cent and turnover to nearly e100 billion and believes that Asia Pacific will be instrumental in this growth.

In IGD's The Carrefour Report 2003 the industry think-tank states that, as the European markets become increasingly mature, Carrefour is likely to look towards its operations in other world regions, such as China, for growth. Carrefour is the No. 3 retailer in China and IGD believes that this market holds the most exciting growth prospects for the group.

IGD says that retailers with global ambitions should put China at the top of their country wish-list. After assessing 75 markets IGD identified China as offering the most attractive development opportunities. It is a large market with strong potential growth levels and is of long-term strategic importance, something already recognised by Auchan, Metro and Wal-Mart, who all operate in China and are developing rapidly following China's entry into the World Trade Organisation in 2001. Wal-Mart wants to have 44 stores by the end of 2003 and Metro plans to open a further 40 stores within the next three to five years.

By 2006 Carrefour's sales area in Asia is expected to increase by 25.3 per cent annually. It already has the most extensive operations throughout Asia of the Western retailers, operating over 100 hypermarkets across eight countries, and nearly a quarter of its Asia Pacific turnover comes from China. China is one of Carrefour's key success stories. Its hypermarket operations in the country are rated as one of the group's top ten performing business units and it has stores in 15 of China's 17 major cities with plans to expand its operations further, opening ten to 15 hypermarkets per year. By the end of 2004, Carrefour expects to operate 65-70 hypermarkets, thus doubling its size in the country over the next two years.

In addition to organic growth through hypermarkets, Carrefour plans to launch its Dia discount chain in China this year. Recent reports suggest that Carrefour has signed joint venture agreements with both Lianhua and Beijing Shoulian, an arm of the Beijing municipal government, to create Dia discount stores within the country. The retailer expects to operate 70 hard discount stores in China by the end of 2003, with a sales area of between 300m2 and 500m2 each and prices are expected to be 10 per cent lower than those of Carrefour hypermarkets. Looking ahead, Carrefour plans to open 300 discount stores over the next five years and believes it could operate as many as several thousand Dia stores within the country. The retailer has also been seeking local partners to help launch its supermarket format into China and expects to launch in 2004.

IGD business manager, Louise Spillard, says: "The moves in China will lay the foundations for Carrefour's multi-format strategy in Asia. In the short to medium term the group is likely to roll out its discount format across the region and key markets for discount stores are likely to be Taiwan, Thailand and South Korea where the retailer needs to gain market share to keep pace with aggressive competitors. In the medium to longer term, Carrefour is likely to roll out its supermarkets format to some of its most successful markets within the region. Carrefour is well placed to remain one of the most powerful grocery retailers in the future and we see both Asia Pacific and the discount format being instrumental in this."

IGD's The Carrefour Report 2003 gives a comprehensive review of Carrefour's strategy and current global operations and analyses the group's future development prospects.

For further information on this press release please contact: Sarah Harper, Tel: +44 (0) 1923 851922; Mobile: 07785 257974; E-mail: sarah.harper@igd.com; Catherine Ellwood. Tel: +44 (0) 1923 851916; Mobile: 07718 580103; E-mail: catherine.ellwood@igd.com