Carrefour CEO Lars Olofsson has revealed more of its plans to revitalise the hypermarket format and revive flagging sales in its French home market and across the rest of Europe.
In a conference call with analysts yesterday (31 August), Olofsson said the company was focused on three operational priorities – delighting customers, continuing to rejuvenate and innovate its banners, while enhancing efficiency and reducing costs.
Originally the hypermarket concept focused on “everything under one roof, because there was a good flow of clients and a good opportunity to sell,” he said. “That is the past. Things have evolved and that is the real opportunity for the reinvention.”
One of the key parts of this initiative was the launch of its Carrefour ‘Planet’ store concept last week. Olofsson revealed that the new stores are “not going to be everything under one roof” as the retailer’s hypermarkets have operated in the past.
Aside from the two outlets that opened last week, he announced Carrfour will be opening two pilot stores in Spain and one in Belgium, with full details on the roll out to be announced in mid-September.
He said the new stores are broken down into three channels – multispecialist (non-food), fresh food and dry groceries.
“The goal is to become a multispecialist. That means making choices [for the customer], not because there is an opportunity with a client’s flow,” Olofsson said. He added customers would see the biggest changes in its new non-food offer, where “some categories will disappear, while others have been revamped and rethought.”
Its dry grocery offer is also likely to see significant changes, with Olofsson announcing the company is reducing the number of SKUs it offers across the board by 15% while expanding its Carrefour-branded offer. However, he said that with the changes, the company would increase the number of “Customer Need Units” by 5% and make it easier for customers to find products in its outlets.
He laid down the gauntlet to manufacturers and confirmed that the retailer has no plans to set up significant R&D facilities. He said: “We can capture innovation coming from the market, we don’t need to build up bricks and mortar R&D centres, the ideas, they are out in the market.”
Looking at marketing, with the increased investment the retailer is making in the Carrefour brand, Olofsson said the retailer will be able to attract top talent to the retailer. “Until today we were not a marketing driven company,” he said. “Until today we were a purchasing and selling driven company. With the development today, we will have the ability to attract the top talent to make the Carrefour brand flourish.”
Comparing Carrefour’s production capacity against branded manufacturers, Olofsson said, that where a large manufacturer has access to around 100 factories, it has access to over 1,000.
Additionally, he said the company’s access to shelf space and customer data will mean that it is able to trial products without a long research process before getting them into stores.
“If we go down the line we have chosen, we will be able to make the Carrefour brand much bigger than it is today, be much more competitive and become a loved brand,” he said.
The market seems to have warmed to Olofsson’s ability to revitalise the brand, with stocks trading 3.27% higher at 11:59 CEST.