It’s official: the self-proclaimed inventor of the hypermarket is no longer an international retailer. Carrefour wants to become number one in France through acquisitions; the rest seems secondary, judging by the neither-fish-nor-fowl strategy presented by Alexandre Bompard on Wednesday.
Muddling through
The human capacity to ignore hard facts is virtually endless. This was demonstrated once again this week during the presentation of the so-called “radical” Carrefour 2030 plan by the highest-paid CEO in European food retail, who stubbornly refuses to question the hopelessly outdated model of hypermarkets, which have been in the red for eight years in their home market. Is it because the retailer considers itself – quite unjustifiably, by the way – to be the inventor of this outdated concept?
To be clear, Einstein never said that doing the same thing over and over again and expecting different results is the definition of insanity, but it remains a good quote that perfectly applies to Wednesday morning’s strategic update, which ultimately amounts to more of the same: focusing even more on fresh produce, own brands, franchising, price reductions and AI? Bonne chance, Monsieur Bompard! Eight years of muddling through, and the share price promptly fell again after the presentation. Faut le faire!
Weak move
Part of the problem, I fear, is that the CEO is French, and Carrefour is a French monument that cannot be touched. Restructuring in the home market is taboo. The decision to sell off surplus countries should generate money to finance domestic acquisitions, which will enable the number two to fend off those pesky Musketeers breathing down its neck on the one hand, and to take the podium spot away from that irritatingly media-savvy Michel-Edouard Leclerc on the other.
But how? I’d like to see that. On holiday in Paris, the Loire region, Brittany or Provence, I was never really impressed by the local Carrefour hypermarket, Market or City. Have you? Lots of mediocrity, poor execution. The fact that the retailer now wants to outsource its fruit and vegetable departments to an external fresh produce specialist speaks volumes. It’s a weak move. And in Spain, the retailer lost market share last year, just saying.
Retreat
Let’s be honest: Carrefour is not an international retailer. Never has been, for that matter. We have seen this in Belgium for more than twenty years, with a procession of seven expat CEOs who did not understand the local market at all – and made little effort to do so, because the country was just a stopover in their steep careers. It will have been no different in other countries.
No, this is a thoroughly Franco-French chain with a few foreign side activities that are now proving too costly. So the company is retreating to its home market. The Carrefour 2030 strategy is therefore not a bold battle plan, not a growth path, not a new start: it is the acknowledgement of defeat.
