The 3 pillars of the new Carrefour

Alexandre Bompard – Carrefour new CEO since July 2017 - has released his plan for Carrefour 2022, and the roadmap to follow for the next 5 years. There will be a deep restructuration, especially in France where it makes 45% of its global turnover (€88bn).

The 1st pillar : a restructuration at all levels

This will be done with the view to reduce costs. This restructuration will impact France, the most important country for the distributor, where market shares have fallen every year. From 21.5% in 2015, they went down to 20.5% in 2017. The group has 12 different HQ there. The CEO wants to simplify the organisation and plan 2 400 voluntary staff departures. Massy will be the HQ for the Group and France. On the stores side, no hypermarkets should close but their format should be revamped, decreasing the areas of the stores. By 2022, this would mean cutting a total of 100 000sqm, representing 5% of the parc.

With regards to the network Dia France (bought in 2014), which has generated a loss of over 150m in 2017, 273 shops out of the 600 managed by Carrefour will be sold.

The priority will also be on the opening of 2000 local stores across the world by 2022, especially in metropoles and on developing the cash & carry format.

2nd Pillar: generating €5bn of turnover through online food shopping

There will be an investment of €2.8bn at a global level on the digital and omni-channel fronts, which represents €560m per year – six times the actual budget. In so doing, Carrefour aims at generating €5bn of turnover through online shopping over the next 5 years, and reaching a 20% market shares in France which would make Carrefour the leader in online food shopping in the country.

Carrefour will also reinforce its delivery services. From 2018, 15 new cities in France will benefit from the delivery service Day + 1 (totalling 26 cities) and 10 new cities will benefit from the delivery service within an hour (15 in total). From 2019, 50% of the French shops will be able to receive click & collect orders.

The drive-through stores will also be developed. “Carrefour only has 10% market shares on this segment, in a market worth €5bn” says CEO Alexandre Bompard. 170 new drive-through stores will open in 2018 bringing the number of drive-through stores to 770 units. It aims to compete with E. Leclerc which has today 640 drive-through stores and makes 5 times more sales than Carrefour.

Finally, half of the marketing budget will be dedicated to the digital by 2022 (compared to 8% today).

3rd pillar: creating a new model and a new offer

Carrefour wants to rethink its offer to promote food quality. Therefore the group aims for a growth of its turnover on the fresh products section 3 times higher than those of the CPG. It also aims to gain one million additional clients by 2022 for this segment.

On the side of organic products, Carrefour aims to increase its sales from organic farming to €5bn by 2022 (compared to €1.3bn today).

Finally, the plan is to increase Carrefour’ private labels so they represent 33% of its turnover by 2022 compared to 22% today.

(Morgan Leclerc, LSA n. 2492, 1st February 2018)
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