Carrefour will open in India, will put money into Malaysia


Paris – Carrefour SA

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Chief government Lars Olofsson referred to as off the sale of the corporate’s Malaysian shops and stated the retailer would put money into them as an alternative, sustaining its grip on the rising market.

Carrefour, the world’s second largest retailer after Wal-Mart shops Inc.,

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is specializing in its European companies, the place the corporate is already a significant competitor. As a part of this technique, the corporate final week offered its enterprise in Thailand, the place a number of rivals have been robust, for €868 million ($1.17 billion).

Merchandise displayed on the shelf at Carrefour Hypermarket in Malaysia.

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However the focus on Europe has raised eyebrows, as stagnant shopper spending and financial troubles within the area dampened the expansion prospects of most corporations.

Mr Olofsson stated in an interview on Wednesday that the Malaysian unit’s deliberate public sale didn’t yield bids that might have taken applicable motion. In consequence, the corporate determined to have a Malaysian enterprise and two shops in Singapore. Carrefour didn’t say what he anticipated to get for the shops.

“We are able to create numerous worth by doing it ourselves,” stated Mr. Olofsson. “We’ve got some very encouraging progress prospects in Malaysia.”

Rising markets account for 30% of Carrefour’s gross sales, and Mr. Olofsson stated he expects spending energy for customers in Asia and Latin America to develop as they develop. “Rising markets are going to be a significant engine of progress for our firm within the medium and long run,” stated Mr. Olofsson.

Nevertheless, the Swedish government isn’t turning its again on Europe. Mr. Olofsson in September unveiled a €1.5 billion redesign of Carrefour’s hypermarkets, which promote a variety of merchandise from hamburgers to {hardware}. He expects the funding to spice up gross sales.

“If you wish to be robust elsewhere, you must have a robust base at dwelling,” he stated. “Whenever you’re strong and calm, that is when you possibly can make investments.”

Carrefour was one of many early main retailers to develop its footprint in Asia and different rising markets. Within the mid-Nineties the corporate opened its first shops in international locations reminiscent of Malaysia, Thailand and Turkey. However over time, the corporate has been taking again a few of these markets. For instance, Mr. Olofson’s predecessor offered unprofitable companies in Japan and Mexico.

Mr Olofsson, who joined the retailer two years in the past from Swiss meals firm Nestle SA,

has centered on markets the place Carrefour may very well be one of many high two rivals. That is why Carrefour pulled out of Russia final 12 months, simply 4 months after opening its first retailer.

And whereas Carrefour was the primary main retailer to open in Thailand, the corporate misplaced that lead by not investing sufficient, Mr. Olofsson stated. Different rivals, together with Britain’s Tesco plc and France’s Groupe On line casino SA, streamed in Thailand, pushing Carrefour’s place to fifth with 42 shops. “Whenever you go to a number of international locations, the sources are usually not limitless,” he stated. “As a substitute of going deep in a single nation, we have been skinny in lots of international locations.”

The situation is totally different in Malaysia, the place Carrefour has 23 shops, as Carrefour has grabbed the No. 3 spot. Mr Olofsson stated the corporate may break into the highest two. Due to the proceeds from the Thai sale, “we now have extra monetary energy to develop quickly, particularly in Malaysia,” he added,

Mr. Olofsson stated he would additionally take into account investing in different components of Asia. Carrefour has a number one place in Indonesia, the place its largest competitor, PT Matahari Putra Prima, is on the market. “I do not suppose it is an awesome alternative, however we’re seeing it,” he stated. Carrefour’s first retailer in India is anticipated to open by the tip of the 12 months.

Mr Olofsson stated he has determined to stay in different markets the place Carrefour isn’t within the high two, together with Poland.

In the meantime, Mr Olofsson is fixing his costly hypermarket makeover in Europe. 4 of the 5 pilot shops in France, Spain and Belgium are doing effectively, however Mr Olofsson stated one retailer in Acully, close to Lyon, France, fell wanting expectations. They’ve pushed again the reworking of 5 French shops to January to keep away from interfering with Christmas gross sales. The foremost renovation work on the five hundred shops will start in April, he stated.

write to Mimosa Spencer at mimosa.spenser@dowjones.com and Christina Passariello at christina.passariello@wsj.com

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