Unbeatable prices in a low-cost environment: that’s the Carrefour Essentiel concept in a nutshell. The retailer is currently testing the new formula in Avignon as one of the possible avenues to save Carrefour’s unprofitable hypermarkets.
‘The difference refunded five times’
Big red signs alert shoppers to the promise of unbeatable prices, round prices and ‘the difference refunded five times’. At the entrance there is a large outlet area as well as a more traditional promotional zone. Food products are put on display on metal warehouse shelves and on pallets. All fresh food departments are self-service, except for the butcher’s, which is outsourced. The store does have an extensive organic department. Non-food is very limited.
Carrefour converted an existing, loss-making hypermarket to this new concept. The store’s surface was reduced from 10,500 sqm to 7,500 sqm and the assortment went from 32,000 to 15,000 sku’s, resulting in wider aisles and a clearer assortment that’s easier to ‘read’. Half of the 24 registers have been replaced by self-scanners. In short, the store’s name is aptly chosen: all the fat has been trimmed in order to focus on the essence. No decoration, no unnecessary items. There should be the potential for about ten outlets.
Various avenues
This low-cost model is just one of the testing grounds launched by Carrefour. Another one is a model that offers more local autonomy to franchisees (called ‘Rebonds’) as well as one that mainly focuses on food with an added restaurant section (‘Next’). In addition, the retailer will be franchising more stores. In every hypermarket, the non-food assortment will be reduced to make more room for fresh and organic and there will be automatic registers. Major stores will become smaller and the number of pickup points and delivery services will be expanded. Hypermarkets represent about 25% of Carrefour’s turnover on the French domestic market.
