Carrefour Making A Comeback At Home


France-based multinational retailer Carrefour has been making tangible progress towards a comeback in its domestic market, where its competitiveness has been under scrutiny for a few years now. With new CEO George Plassat at the helm of the company , a greater focus on competitive pricing is believed to be at the centre of its turnaround strategy.

Carrefour has found itself in an uncomfortable position in France , where many of its hypermarkets are arguably dated and not conveniently accessible at a time when convenience has become so important. Therefore, we believe that a sustained recovery - or at least a tangible improvement on the past few years, particularly in the post - global financial crisis weak consumer environment - will have pricing at the cornerstone. Using the performance of Carrefour's share price as a proxy since Plassat took charge in mid-2012, investors have been feeling better about Carrefour's ou tlook , with its share price at the time of writing up by about 41% since July 1 2012.

Strong Gains Since Plassat Took The Reins
Carrefour Daily Share Price (EUR)

Carrefour's core retailing business in France is built around hypermarkets, which are not as popular as they once were. Given Carrefour's size (it is the world's second largest retailer behind Walmart by sales), it has been much harder for it to be agile and respond effectively to the evolution of French retail over the past few years, namely the greater emphasis placed on convenience. Making itself more competitive by responding to the fundamental changes in French retailing will take a number of years . In the interim, pricing will be hugely important. Plassat has sold a number of international assets since taking control of the company , and this has freed up capital to take on the challenge at home. Even if emerging market expansion is extremely important to growth, it seems that for the time being, Carrefour will have to keep its eyes firmly on France.

This article is tagged to:
Sector: Food & Drink
Geography: France