With its all-new Carrefour Planet hypermarket chain and with a target of 18% sales growth in five years, the French retail giant is clearly reaching for the stars. But will the French retail giant succeed?
Last week, Carrefour CEO Lars Olofsson unveiled more details of the new store concept, which will be rolled out to half the retailer’s hypermarkets in France, Spain, Italy, Belgium and Greece.
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In each store, the food offer will be divided into three – fresh food, frozen food and organic – while outlets will also have a chef and a sushi bar in-store. With a raft of new ideas in each store’s hypermarket non-food sections, Carrefour believes this attempt to revitalise its troublesome hypermarket network will boost sales.
As well as Carrefour’s forecast that Carrefour Planet will add 18% to its sales by 2015, the retail giant predicted that, when accounting for its other programmes on cost cuts and purchasing savings, it expects sales to increase by 51% by 2015 against 2009 levels.
Carrefour’s shares rose by more than 4% on the news, although some industry watchers remain unconvinced. RBS analyst Justin Scarborough described Carrefour’s 2015 forecasts as “incredible”, adding that he did not think that “setting such targets is particularly sensible”.
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Nevertheless, according to Sanford Bernstein analyst Christopher Hogbin, some of the initial numbers from the first stores to switch to the new concept have been encouraging. It does, however, remain very early days. With reports of Carrefour’s purported plans to sell stores in Asia rumbling on, Olofsson has much to ponder.
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By GlobalDataWal-Mart, the world’s largest retailer, also has plenty of food for thought. Bill Simon, the head of Wal-Mart’s US business admitted last week that the retail giant’s “very aggressive” Rollback campaign had not paid off and said the company was refocusing on EDLP. Simon also had some encouraging comments for suppliers as Wal-Mart reviews last year’s moves to cut the SKUs on sale in its Supercenters by 15%. Wal-Mart’s US sales have been weak in recent months and the retailer’s plans to restore some SKUs suggests its moves to cut the number of products it sells did not pay off.
Simon was talking at the Goldman Sachs Retail Conference, a key annual event in the US retail calendar. At the event, US general retailer Target Corp. also revealed plans to roll out its ‘fresh food’ initiative to several hundred more stores next year. The PFresh grocery departments had been a “success”, Target CFO Doug Scovanner said, and the company, which sells apparel and mass merchandise wanted more of its stores to carry food products. For fully-fledged grocery retailers, and even for larger rivals like Wal-Mart, Target’s plans for PFresh will have made waves.
This Thursday (23 September), more waves are set to be made in the hostile takeover battle for US convenience-store retailer Casey’s General Stores. Casey’s holds its AGM on Thursday where investors are set to vote on the election of the company’s board. As well as Casey’s set of nominations for the board, Couche-Tard, which has had a series of takeover bids for the US firm rejected, has put up its own slate of nominees.
The takeover battle has thundered along for five months but has grown increasingly bitter in recent days. Couche-Tard has expressed exasperation at Casey’s decision to open talks with a rival bidder, 7-Eleven, even after rejecting that company’s takeover bid. Both Couche-Tard and Casey’s have published correspondence between the two companies that showed continuing criticism of each other’s strategies. And, late last week, Couche-Tard received a potential blow in its battle for control of Casey’s board when four proxy bodies recommended shareholders back Casey’s nominations.
Whether, ultimately, Casey’s will stay independent, extract a higher bid from 7-Eleven, or even accept a better offer from Couche-Tard remains open to question. But have relations between Couche-Tard and Casey’s soured so much that the Canadians will find hard to get their man?
