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September 28, 2011

WRC 2011: Carrefour defends performance of Planet format

Carrefour's hypermarket format Carrefour Planet is performing "much better" than expected, given the economic turmoil in Europe, according to a senior executive at the French retail giant.

Carrefour’s hypermarket format Carrefour Planet is performing “much better” than expected, given the economic turmoil in Europe, according to a senior executive at the French retail giant.

The company launched its Carrefour Planet concept last year in a bid to revitalise its hypermarket business. At the time, the retailer said it planned to convert 500 stores to the Planet banner by 2013 and claimed that the format would add 18% to its sales by 2015.

The pace of the roll out has slowed but analysts have expressed satisfaction with the performance of the Carrefour Planet stores in operation.

Speaking at the World Retail Congress in Berlin today (28 September), Carrefour chief commercial officer Jose Carlos Gonzalez-Hurtado said the original four Carrefour Planet pilot stores had seen customer numbers grow 13% and turnover climb over 14% in the first six months of the year.

It emerged, however, that growth from the pilot stores is higher than that seen in Carrefour’s newer Planet stores. Gonzalez-Hurtado pointed out, however, that the newest outlets are performing better than stores coverted to the format.

He described the Carrefour Planet concept as the retailer’s “best innovation in the last 30 years”, telling the audience: “Everybody was saying the hypermarket is dead. We had to have courage.”

However, Gonzalez-Hurtado admitted Carrefour had “made mistakes”. He said the retailer’s initial optimism about its new store format in Europe was “bullish” but insisted Carrefour Planet remained key to its success, adding that the company would have 50 of the stores by the end of this month.

“If I knew then what I know now in September 2010, would I have been so bullish? The answer is no,” he said. “The market and the world economy have changed but it’s going much much better than I expected, despite all this.”

Carrefour has Carrefour Planet stores in France, Belgium, Spain, Italy and now Greece, where the first outlet opened earlier this month. Gonzalez-Hurtado said Carrefour is adopting a “wait and see” attitude about the format in crisis-hit Greece.

He said: “Obviously we’re going to be fine-tuning the roll-out plan, but all the hypermarkets will get ‘Planet thinking’. Whether they will have the Planet name or not is based on a strict criteria. Some stores we were looking at a year ago, we are now saying ‘whoa, wait a minute, let’s re-think that’. The responsible thing to do is wait and see.”

When asked if Brazil could be a ripe market for the Carrefour Planet format, Gonzalez-Hurtado remained coy. “We’re doing very well in Brazil, we’re the number one retailer but it’s always in our radar screen. We’re doing a roll-out in Europe first, for the time being.”

The future of Carrefour’s business in Brazil has been the subject of speculation. Earlier this year, a plan to merge its local operations with the country’s largest retailer, CBD, fell through. There have been rumours that other retailers, including Wal-Mart Stores, have been interested in buying Carrefour’s Brazilian business.

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