Blog: Dean BestAmid speculation, China remains priority for Carrefour

Dean Best | 25 June 2013

Fresh speculation has emerged about Carrefour's business in China. A report has claimed the retail giant is looking at an IPO of its Chinese operations or at teaming up with a local partner to try to boost a business that is fourth in the market. 

The claims, in The Wall Street Journal, come just days after Carrefour set out ambitious expansion plans for China, a market the retailer - which has scaled back its international operations in recent months - has said will be the target of further investment this year.

According to the WSJ, which cited anonymous sources "familiar with the matter", an IPO could raise funds for expansion in China. Joining forces with another player is also being considered, the report said.

When contacted by just-food, Carrefour refused to be drawn on the report. "There are a lot of rumours. The group does not comment on them."

In November, Carrefour "formally denied" reports it was in talks over a potential partnership with local retailer China Resources Enterprise.

Since then, Carrefour has made further official comments about its plans for China. Last week, Carrefour confirmed plans to increase its presence in China through expansion into 30 new cities over three years.

Last year, Carrefour saw its operating revenues in China increase 10.8% to EUR5.58bn (US$7.3bn). However, at constant exchange rates, like-for-like sales excluding fuel fell 5.1%.

When Carrefour reported its annual results in March, the retailer said it would increase its capital expenditure this year - with China one of the markets that would see more investment. "In China, in some of the larger towns and cities, we have to do something or we will be outdated compared to the competition," CEO Georges Plassat said at the time.

China therefore seems to remain a priority for Carrefour, which has quit markets including Indonesia and Colombia in recent months.

Whether Carrefour goes about trying to improve its position in China through an IPO or a partnership is uncertain.


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