Hellal MariemErasmus Student Number: 069092107Word count: 9722 words

ACE 3002: Strategic Marketing

The internationalisation of Carrefour

A marketing critic of Carrefour’s international expansion

Executive summary:

Carrefour opened its first hypermarket in Spain in 1973. It is the first store out of its domestic market. After that Carrefour gradually spread across the world in three main geographic areas: Europe, Latin America and Asia. Now Carrefour, the world’s second largest retailer after Wal-Mart has announced this year a net profit increase of 10,8 percent to 706 million euros. This improvement is due to an aggressive price reduction and the will to attract new customers across the world by opening new stores. These results exceed most analysts’ expectations. In France, sales grow 6, 3 percent to 17, 94 billion euros and overall. Moreover, more than a half (almost 52 percent) of the Carrefour consolidated net sales in 2005 is made out of its domestic market. “We are growing faster in a more targeted way” said the Chief executive officer who confirmed also that Carrefour was in line to open 100 hypermarkets before yearend.

With the emergent market, which is represented by the Chinese market for instance, Carrefour sees in the Asia-pacific area the ability to develop its activities and to increase its revenue. Their overseas expansion focuses on a few key emerging markets. These markets, which offered growth opportunities, are characterized by the need to have retail structures. Carrefour’s marketing strategies is mainly to strengthen its position by increasing the number of overseas store and by cutting prices. The aim is to develop the Carrefour brand worldwide. Thus the challenge is to success the development of the Carrefour network in Latin America, Asia and especially in China.

Nowadays Carrefour has to be confronted to increasingly strong competitors like Wal-Mart or Tesco. Therefore it has to develop international strategies in order to strengthen its leadership position in Europe and to succeed in the American and Asian markets. For that it adds new floor area by new acquisitions, store openings or enlargements. It repositions its prices by practising an offensive price reduction. In addition it adapts and develops new stores’ formats in each country. To succeed Carrefour need to learn to know both the Asian and the Latin-American cultures in order to be able to attract these people. The Carrefour’s image remains seen as a high added value brand. Thus the group can hope to success in the Asian market.

2

Table of contents

Introduction 41 Methodology 52 Business description 63 Market screening: PEST Analysis 8

3. 1 Political issues 83. 2 Economic issues 83. 3 Social issues 93. 4 Technologic issues 9

4 Carrefour strategy 104. 1 Its position 104. 2 The Competitors 104. 3 Carrefour’s objectives 134. 4 The augmented product 144. 5 Brand component evaluation 154. 6 Brand personality evaluation 15

5 The Carrefour’s expansion around the world 155. 1 Motives for the international expansion 18 5. 2 Carrefour international strategy 195. 3 Carrefour around the world 19

5. 3. A Europe 195. 3. B Latin America 205. 3. C Asia 20

China 21What about India 22

5. 3. D The former countries 226 Marketing Analyses 23

6. 1 SWOT Analyses 236. 2 The BCG Matrix applied to Carrefour 24

7 Marketing mix 267. 1 Price 267. 2 Product 277. 3 Place 277. 4 Promotion 287. 5 Personnel 28

8 Concluding remarks and recommendations for the future 29Bibliography 30Appendix 1: Chinese Carrefour advertisement 33

3

Introduction:

Carrefour SA is the first retailer in Europe and the second largest worldwide. It has stores in 29 countries in Latin America, Asia and Europe. Yet there is also countries where Carrefour is established only through its partners and franchisees for instance in Egypt or Japan. Thus Carrefour is present in all the geographic areas of the world.

This report aims to analyze Carrefour’s marketing strategies in overseas markets, with a partial focus on china. Recommended actions for future progress and failures will be presented at the end of this report.

The report begins with an executive summary which explains the methodology used for this report in section 1. Then the motives for the overseas expansion will be accounted for in the Business description section. In the section 3 the general strategy of Carrefour group will be analyze with a partial focus on the brand component and the brand personality. The section 4 deals with the market screening; this part shows the risks and the opportunities of the Carrefour marketing strategies. The internationalization of the group Carrefour is treated in the section 5 and especially the benchmarking with competitors. Then The Swot analysis, the BCG matrix and other analysis are presented in the section 6 Analysis. The Carrefour market mix analysis is introduced in the section 7. And finally conclusions and recommendations are presented on the last section of this report. A portfolio of information sources and appendix are in the end of the report.

4

Section1: Methodology

To a large extent, this report is based on secondary sources mainly articles, company reports and data coming from Datamonitor. These sources allow analysing the global food retail and especially both the Asian and European food retail industry. In addition two interviews have been made to illustrate the presence of Carrefour in china: the first one is an interview of a former employee in Carrefour china and the other is an interview of a European manager who has worked in Carrefour china. These interviews allow understanding the differences between European and Chinese cultures and the challenge that represents the Chinese market for the future.

Other information has also been obtained by lectures, other critical reports made by old students and seminars in marketing, globalisation and business strategy.

Limitations:Due to the lack of time and means, this report lacks of interviews and primary sources. Moreover it was really difficult to find information about the Asian and Latin-American markets.

5

Section 2: Business description

In 1959, Carrefour was founded by two entrepreneurs Marcel Fournier and Louis Defforey. Carrefour pioneered the concept of hypermarket, a large supermarket offering a large variety of products and a department store under the same roof. They opened their first hypermarket in 1962 near Paris in France. Gradually Carrefour has developed into a modern corporation, thus improving its competitiveness and market presence considerably. Carrefour has expanded steadily since 1969. Now it is an international supermarket group with a global network of supermarkets across the world. It serves 2 billion clients per year in more than 7,000 stores which are present in 29 countries. 436,000 employees work for Carrefour. It is not only the second but also the most internationalized retailer worldwide. It operates mainly in the European Union, Latin America, and Asia but also in North Africa. In 1999 it merged with Promodès one of its major competitors on the French market to form the first retailer in Europe. Now Carrefour is:

In Europe: Belgium, Switzerland, Romania, Spain, Greece, Italy, Poland, Portugal, Turkey, France, Poland, Czech Republic, Slovakia. Carrefour is leader in Europe, having established strong positions in 13 European countries.

In Asia: China, Hong-Kong, Indonesia, Japan, Korea, Malaysia, Singapore, Thailand, Taiwan. Carrefour was the first international retailer to establish a presence in Asia in 1989. The group is now present in 9 Asian countries and regions.

In America: Argentina, Brazil, Columbia, Chile. Carrefour is the leading retailer in Latin America, with a presence in the 3 largest countries in South America.

Moreover there are countries where Carrefour is established only through its partners and franchisees: United Arab Emirates, Qatar, Santo Dominguo, Tunisia, Egypt, Oman, Saudi Arabia, Japan, and Algeria.

Source : 2005 annual Carrefour report

French retailing giant Carrefour had 7196 (end of September 2006) stores. These figures show that Carrefour has chosen to be internationally diversified. In 2006, Carrefour plans to

6

accelerate organic growth by opening 1,000 new stores, including up to 100 hypermarkets. The retailer expects to add a total of 1, 5 million square meters of floor space (euro-retail flash, Management Ventures Inc).

The main focus of Carrefour is to understand the customer, to satisfy it and to offer the best possible prices for high-quality products and services. For that Carrefour try to be active and competitive in all types of retail distribution, primarily food retailing with;

The Carrefour hypermarkets offer a large range of food and non-food products (80,000 items) at very attractive prices. Floor areas of hypermarkets range from 5,000 sq.m to 20,000.

The supermarkets offer a large selection of mostly food products, at very competitive prices, in outlets featuring floor areas of 1,000 to 2,000 sq.m.

Hard discounters stock around 800 food products, at unbeatable prices, in small stores (from 200 to 800 sq.m). Half of the products are sold under the Dia brand name.

Convenience stores offer a range of products covering all food requirements and sometimes they also offer services.

Cash-and-carry, wholesale and retail self-service, take also part from the services that has Carrefour. This form of store offer mainly food products and intended for businesses.

Recently Electronic commerce becomes one of the new services that Carrefour offers: it is a cyber-market where shopping can be ordered on the Internet and delivered to the door. Thus it creates two cyber-shopping’s stores:

Carrefour strategy consists of building new format of store in each country in where it does business and it expands the type of retailing best suited to the local market. It takes advantage of the way their formats complement one another.

7

Section 3: Market Screening: Political, Economic, Social and Technologic Analysis

A PEST Analysis allows analysing the international Marketing environment by determining the macroenvironmental issues and the microenvironmental issues linked to the expansion of Carrefour across the world. A PEST analysis shows the major influences on demand and especially the attractiveness of these new markets.

1) Political issues:

The political-legal environment affects the country’s attractiveness. Legal barriers can stop the expansion of the retail industry in some countries. Carrefour had to face to some legal problems. In Asia, Carrefour had to take the legal considerations into account. Therefore it chose to have local partners in China, Thailand and Taiwan. Carrefour had met numerous problems with the local government in Beijing; this government did not understand the role of Carrefour. That is why Carrefour had to be introduced by its local partner to explain what Carrefour is. After that this government asked Carrefour to do something to modernize the small retail business there. Thus Carrefour must cooperate with the local government. Even if Carrefour tried to respond to the legal considerations, in 2001 the central government stopped the Carrefour expansion, saying that Carrefour did not have the correct approvals from Beijing. It was a difficult period for Carrefour because it had stopped its expansion for 18 months. After talks between the two parts, the government allows to Carrefour to continue its expansion only if Carrefour opens new stores in small towns. Government pushed Carrefour to open stores everywhere and not only in the big cities like Beijing. Ultimately Carrefour has to respond to the government pressures.Moreover Carrefour has to take the severe measures invoked by governments into account to protect their domestic industries; for instance in India or in Thailand quotas limiting the number of goods and new stores, special tax on imports, non-tariff barriers and product legislation had been set up. Governments want to protect small local retailers from competition of foreign-owned hypermarkets.

2) Economic issues:

One of the main issues which can determine the Carrefour’s choice of markets is the economic opportunities and risks of each market.First of all the emerging markets are growing faster: they offer a growth opportunity for the Carrefour’s turnover. Moreover new segments and needs can emerge when the GDP per capita increases; for instance mobile phones market is increasingly developed in emerging countries. These markets have other numerous opportunities such as their high market size, their high number of potential consumers. The Chinese population accounts for 20% of the world population with 1,3 billion people and 71% of this people are between 15 and 64: they can represent potential consumers. Therefore the Chinese market represents a great opportunity. Carrefour can reap benefits of these big markets to make economies of scale in terms of marketing, logistics, buying and labour costs.

Although these emergent markets are interesting, they remain risky. They have low income per person, high rates of unemployment (9% in China and 10% in Brazil), volatile currencies, high inflation rates (6,8% in Brazil) which means that in Brazil the prices are really unstable and a high rate of their people live under the poverty line (22% in Brazil) which shows that they are still poor countries. In addition they have a low GDP per capita: $8,300 in Brazil and $6,800 in China which is really low compared to the GDP per Capita of the developed

8

countries: in France $29,600 or in UK $30,100. These macroeconomic characteristics show that the emergent countries stay countries in when it is risky to invest in the retail industry. Besides these countries have already suffered from economic crisis such as the Latin-American crisis in 2002 in where Argentina and other American countries have been affected by a depressed economic situation with devaluation of local currencies and high inflation rates.

Even if there are macroeconomic problems in these countries, all the retailers see these countries as interesting markets which offer growth opportunities. Therefore different competitors with the same strategies want to enter in these markets. This creates price competition which is a new challenge that Carrefour has to win. In new emerging countries the competing players are still small and not able to offer the same variety of products. For global retailer these markets account for a mean to make high margin. Undoubtedly these markets require investments. There are cost for entering, building a brand reputation, attracting customers. However in these countries costs of personnel, land and equipment are below industrialised countries.

3) Social issues:

Understanding the national culture is important if Carrefour aims to penetrate in new markets. Thus Carrefour needs not only to understand the local population but also the local tastes and needs. According to Kotler (1996), cultural barriers have to be identified before going in a different country such as language barriers, local knowledge and local tastes. In china the presence of two main religions (Taoist and Buddhist), the role of the family, the presence of different ethnics groups (Han Chinese, Zhuang…) and above all the presence of different languages in the same country (Mandarin, Cantonese, Shanghaiese…) are cultural barriers which cause difficulties for the Carrefour’s enter in this new market. Moreover Carrefour has to research the local preferences, the local values and the social influences such as the role of the government, the religion, the family and especially the role of the media in the society.

Concerning the population, some of the emerging markets have the advantage of being concentrated in big cities which cause high population density. As a result the costs of stores and personnel are reduced when one supermarket serve a large number of customers.

4) Technologic issues:

These emerging markets have many problems of transport networks especially the Chinese market which has a big size but not really efficient distribution networks. Jean Luc Chéreau, the president of Carrefour China (2006) explains that Carrefour has met problems with the china’s size because there were no networks for logistics systems: the highways and the railways are not very well developed. For instance to receive or to send merchandise from Beijing to Urumqi takes seven days by truck: that was a problem when there was fresh food in the truck. Therefore Carrefour had to work with local distributors and had to continue using national network. Besides tomorrow Carrefour would organize a platform and a network for large cities like Shanghai. These technology requirements cause an increase of the implementation costs. Furthermore customers have not really cars in these poor countries; in China there is only one car for 70 people. Carrefour must take these problems of distribution into account.

9

Section 4: Carrefour strategy

1) Its position

The company is leader in Europe and second in the world.In 2005: it opened 788 new stores and now it is present in 29 countries.

2) The competitors

Due to the lack of time, I will treat only two Carrefour’s competitors Wal-Mart and Tesco whereas there are two other competitors especially in the European market: the Dutch company Ahold and the German Metro AG.

Retailers such as Carrefour, Ahold are former retailers but now increasing rapidly are other Western retailers such as Aldi and Tesco, each of whom operates in at least 10 countries.

Carrefour 51/60 Wal-Mart 53/60 Tesco 49/60

Their position

Leader in Europe and in its home market: France. It is the second larger retailer worldwide. Leader in China and Latin

First and largest retailer worldwide (especially thanks to its leadership in its home market: the united states). It serves 138 million customers

Leader and largest food retailer in its home market: the UK market. Leader in five Asian and European countries: Thailand, Czech

10

America. The company recorded revenues of $104.6 billion during the fiscal year ended December 2005. Carrefour is only about one-fourth the size of Wal-Mart. 8/10

weekly in 16 countries. It recorded total revenues of $312.4 billion during the fiscal year ended January 2006. 10/10

republic, South Korea, Slovakia and Ireland. It posted 2005 sales of $65.2 billion. 7/10

Their international portfolio

It is present in 29 countries. Carrefour derives more of its revenue internationally: 52% versus 20% for Wal-Mart. Carrefour is more internationalized and earlier than Wal-Mart and Tesco. 9/10

The U.S. giant has a total of 6,447 outlets worldwide. It is present in 16 countries. It is not really present in Europe only in the UK through its subsidiary ASDA (currently 263 stores) and in Germany with 95 stores (but local competitors such as Lidl and Aldi cause problems for its German expansion). It is present especially in the United States. Wal-Mart stays a home-region based Multinational Company: in the fiscal year 2005, over 80% of sales were in the U.S. whereas its Chinese sales accounted for only less than one percent. Wal-Mart is less experienced than Carrefour in foreign market expansion. 8,5/10

It operates 2,318 stores worldwide and 1,878 stores throughout the UK. It is present in 13 countries especially in European and Asian countries; for example in Hungary, Poland but also in China, Malaysia, and Thailand. But nearly 80% of group sales and profits come from the UK business. It serves 15 million of customers per week. It began in 1998 its Asian expansion and it has now 300 stores in Asia.7/10

Their image/ reputation

Products at low prices with high value and quality added. Creation of friendly atmosphere at every store. Carrefour is especially synonymous of high quality. Carrefour is seen as a store which understands local differences and preferences of its

High quality, products at lowest price and highest value-added every day. It has a best corporate image than Tesco and Carrefour because of its price policy: “lowest price every day” and this reputation enables it to attract loyal customers. Moreover it is seen as a high-value added company. 9,5/10

The Tesco policy is “to create value for our customers, to earn their lifetime loyalty”, therefore it aims to develop value through its own label. An innovative and developed brand. Very well trained and helpful staff. Thus Tesco is seen as a retailer which sells a large quantity of different products and

11

customers. 8/10 goods. But it is also known for its sales promotion “buy one get one free”.8/10

Their strategy

Adopts a sales-driven business model: price competitiveness, choice, services, reliable brand, rewards for loyalty. It enlarges its assortments, adds staff to the shop floor, re-launches its private label, develops loyalty programmes, mass advertising and products and formats innovation with larger non-food area. Carrefour withdraws from markets where it does not believe it can become a top three retailer: recently Japan or Mexico. Carrefour focuses on “discount every day” to attract customers to buy impulsively.8/10

It practices large economies of scale to set up its “every day low prices” policy. Wal-Mart pushes its suppliers to provide the best product they can at the lowest possible price. It has its own transportation and logistics system. Wal-Mart maintains lowest price everyday and promises customer satisfaction. Wal-Mart emphasizes “lowest price every day” to win the best corporate image. 9/10

Creation of new spaces, extensions and a multi-format approach. Tesco has evolved a strategy based on 6 elements: be flexible, act locally, keep focus, be multi-format, develop capability (training staff…) and build brands. The Tesco strategy aims to be as strong in food as in non-food. It aims to offer high quality, great range, low prices and large services. It focuses its strategy of providing exceptional value and choice for customers. 8/10

Their services/ differences

Carrefour enhances service quality, product innovation, develops private label products and full range of choices for both food and non-food products. Low prices, self-service, free parking and especially freshness are services present in Carrefour stores and these elements are the key of its success. 9/10

Wal-Mart offers a wide range of services: electronics, Financial Services, Pharmacy,Photo, Tires, Travel & Vacations, Vision Centre, Jewellery, Bookshop. 8,5/10

Tesco.com is a subsidiary offering a complete online service including tescodirect.com and Tesco.net. The company also offers a range of both online and offline personal finance services. It is the first supermarket to implement successful internet shopping.Tesco.com is the largest grocery e-retailer in the world Tesco a large choice of services: electrical, home entertainment, clothing, pharmacy, health and beauty, seasonal goods,

12

travel agency, household goods, Telecoms and so on. Tesco has also launched in 1997 its own banking services: Tesco Personal Finance. 10/10

Their formats Four formats, different local brands. A multi-format approach. 9/10

The company operates only through 3 formats: Neighbourhood markets (traditional grocery stores), Sam’s clubs (goods are sold in bulk quantity) and discount stores (the Supercenter with large format) 7,5/10

Four formats: Tesco extra, Tesco superstore, Tesco metro (city centre locations) and Tesco express. Tesco adapts its formats to the customers’ needs such as the Carrefour approach. 9/10

U.S. Wal-Mart and French Carrefour are rivalling with each other to expand Chinese markets. However by joining with Chinese partners, adapting to local culture Carrefour has become the biggest foreign retailer operating in China. Carrefour operates 79 stores in 32 Chinese cities compared with 60 locations in 30 cities for Wal-Mart. Last year, Carrefour's sales in China totalled 2.2 billion dollars, compared with 1.2 billion U.S. for Wal-Mart, official statistics showed. In contrast to Wal-Mart’s internationalization strategy, Carrefour expands to foreign markets faster and more flexible. Carrefour moved to other parts of Europe, America, and Asia that accumulated herself with plenty internationalization experiences. Those experiences enable Carrefour to win over Wal-Mart to hold leading position in emerging markets.

Although Wal-Mart does have 20% of their business outside of the USA, the majority of this is derived from the successful Asda operation in the UK. Thus Wal-Mart appears to be focusing on the USA for future growth. However, entering into developing countries later than its European competitors could put it at a real disadvantage. Carrefour has not only established a presence in these countries, including securing the best sites, it has also the benefits of already understanding the markets, how they operate, and consumer buying behaviour.

3) Carrefour’s objectives

Carrefour had established 4 priorities.

The priorities The means used to reach these prioritiesPrice repositioning and price competitiveness: Improving the price competitiveness of hypermarkets in France and winning market share.

Carrefour maintains a steady and determined commercial policy to maintain low prices. It has launched since 2005 a major price offensive.

Improving profitability and return on capital employed for international operations

Modernisation of the portfolio: Carrefour must consolidate its position around the world through the rationalization and optimization of its portfolio. Carrefour sold non-profitable or non-strategic assets (sale of Japan, Mexico, the Czech Republic, Slovakia, closures of supermarkets in Spain and Brazil)

13

Strengthening its position in key markets

Tactical acquisitions in Greece, Poland and turkey and franchising agreement in France and Italy.Development of loyalty programme.

Establishing the basis for faster profitable growth

Openings and expansions: The group aim to create 1 million sq. m. to have more sales area, to accelerate openings as from 2006 and to continue acquisitions and extensions. It invests to enlarge and strengthen its image by the expansion of floor area.Reinvention of new store formats.Set up of the multi-format strategy which offers to all types of customers the widest choice.The non-food area becomes more important in the new formats.

4) The augmented product

We can notice that there are two ways to see the Carrefour augmented product. Therefore this part contains two graphs. These elements allow differentiating Carrefour from its competitors.

The image/ the reputation the Brand the Value perception

Services store’s formats Before and After sales services

Carrefourhypermarkets

Warrantees

Guarantees

The Quality perception the employees the Corporate Image

Carref

Carrefour Hypermarkets

14

Its portfolio

Non-food areas

Its stores’ formats

Its own Label: Its products

5) Brand component evaluation

Carrefour uses the routes to competitive advantage as keys of success: first of all, it benefits from productivity advantages because it uses economies of scale and its experience to have lower costs. Secondly it benefits from value advantages: its products and services offer greater benefit to customers.

The Carrefour services are really large: financial services, insurance, fuel, delivery at home, travel agency, pharmacy, jewellery, flower shop, ticket agency, bookshop and phone services. Thus various services may be attached or available. Carrefour develops a multi-format strategy; this strategy permits to respond to all the market segments. Carrefour managers understand the customers’ needs and changes and respond to their expectations. That is at the heart of successful marketing. Carrefour aims to develop its portfolio (see the internationalisation section).Carrefour is seen as a quality retailer which provides value. However he has to repositioning its prices to be also seen like a cheap retailer.The Carrefour employees are really attentive to the customers’ needs, Carrefour has also developed a before sales services: thus the Carrefour team offers to the customers free advices in terms of nutrition, products and so on. The Carrefour staff policy is “we are here to help you to better consume”.

6) Brand personality evaluation

The Carrefour brand is characterized by 6 key elements. All these elements permit to differentiate Carrefour from its competitors.

an INNOVATIVE brand It develops new products, new stores and new formats through innovation and adaptation to the customers’ needs.Carrefour takes the facts that the customers change and their needs evolve over time into account. The managers listen to customers, observe their behaviour and understand their environment in order to be able to respond to their expectations. Thanks to its capacity for innovation, Carrefour may now cover all the market segments.New store’s formats allow penetrating target markets. New concepts are born such as the Carrefour Express based on mini-

15

Its competitivenessIts strategy

Its services

Its image/ its reputation

hypermarket, the Urban champion which is a response to a new type of customers who live in town centres, do not have cars, are young and always in a hurry (for instance, this store has accommodated open hours: 9 a.m to 9 p.m) and Maxidia: a larger hard discount. Carrefour continues the rebuilding of its product range.

a VALUE brand A brand which respects its customers thanks to the creation of the group’s quality commitment: the group’s “satisfaction or your money back” policy. Carrefour develops three types of products’ ranges such as Carrefour Agir which is a range that conveys values because this range includes 3 product lines: organic (300 products), nutrition and fair trade. Carrefour products are purchased for the values that they convey.Carrefour guarantees customers optimal food safety.

a DIFFERENT brand A brand which is linked to its customers thanks to the set up of the “Carrefour loyalty programme”. This policy has met success especially in France and in Spain: 30% of French households are currently holders of the Carrefour loyalty card, 5 million Spanish customers have a Carrefour loyalty card. Carrefour has developed this policy in Belgium, Italy, Greece, Turkey since 2005 and since 2006 in China and Taiwan. Moreover, Carrefour develops seasonal renewal of assortments and product ranges, it organises special events like the Chinese new year…Carrefour wants to show that it is an up-to-date retailer. Therefore it has set up personalized credit (in Italy or Brazil for example and in china since this year) or it offers the possibility to make your own Compact Disc. Carrefour develops often a catalogue in where all its products are. He has also an e-magazine which helps people to better consume and eat. Its products convey values.

a SECURE and RESPONSIBLE brand Organic clothing has been available since 2005: these innovative products are made from cotton grown in accordance with the standards of organic agriculture.

16

Carrefour protects its customers and the environment thanks to its continuous anticipation of risks (traceability of products). It provides to customers the quality of information. It fights against obesity (by the launch of the Carrefour agir range), it gives nutritional advices to help customers and the food safety is an absolute priority for it. The group was the instigator of “nutritious days” organized in several countries; these days help to promote all the right reflexes with regard to nutrition.Carrefour protect environment by reducing energy emission for example or developing recyclables. It works with agricultural sector to its Carrefour’s sustainable environment policy and it plays an ethical and social role: it offers satisfactory working conditions for its team.

a LARGE brand Carrefour develops not only food product ranges but also non-food ranges to increase its stores’ power of attraction and to offer a wider range of services to serve its customers better. Carrefour sets up areas for organic products, health food products, fair trade products and upmarket products. For example Carrefour hypermarkets offer a wide range of men’s, women’s and children’s clothing and shoes.

An ATTRACTIVE brand: good quality at relative low prices.

Carrefour aims to improve its price positioning and its price image. It wants to increase price attractiveness for non-food items; for example: telephone products, textile products, electronics… Moreover Carrefour guarantees the quality of its products and shows it by its “satisfaction or your money back” policy. Rigorous quality controls are present.

17

Section 5: The Carrefour’s expansion around the world

1) Motives for the international expansion

Today the French food retail market becomes increasingly saturated: the growth is limited, for Carrefour there are no more opportunities to develop the growth in its domestic market. Its domestic market is become too small, too saturated, with a limited growth and above all very competitive. Kotler (1996) explains that a limited domestic growth and/or an intense domestic competition is/are a key reason why firms enter foreign markets. Therefore Carrefour has chosen to turn to other geographical markets to find new opportunities of growth and to develop an aggressive international strategy in the emerging markets such as the Chinese market. However it has to be careful because its competitors (especially Wal-Mart, Ahold and Tesco) have the same objective than it i.e. to conquest these new markets.

Emerging markets are becoming so attractive; they are growing faster. According to the 7th Annual IGD Conference on Global Retailing (13th of June 2006), changes for the future (2030) must be taken into account:

- economic mass will shift from Europe to Asia, the merging world will become more important

- the emerging countries will become more dynamic and will catch up with G7 in terms of purchasing power

- China and India will be the two emerging giants.

Moreover according to Adam Cross (in Jenkins, 2006) there are two kind of market forces that can turn a company into a “market seeker”: firstly the “push” factors are defined as “forces at play in the retailer’s home market that create pressure for it to consider overseas markets” thus the retailer has reached the saturation point in its domestic market. Secondly “pull” forces are “factors operating outside the domestic market that act to attract a retail chain into considering expansion into that market”. The most recent example is China which has opened its market to the non-national companies only since 2001.

18

2) Carrefour International strategy

Steve Barnes, IGD business director, has shown during the 7th Annual IGD Conference on Global Retailing (June 2006) that there are three main ways to win in these markets; by adapting its formats and its products to the local markets, approaching the market with flexibility and introducing innovation. Carrefour has set up this strategy with success especially in Asia. Carrefour is become a giant retailer with 7,030 stores worldwide. Since 2005 the group has announced a reorganisation of its overseas presence by sales and acquisitions. For instance not only in February 2005 it announced the acquisition of 12 Polish hypermarkets from one of its main competitors Ahold, but also in March 2005 it signed a partnership with Aeon Japan in which Carrefour sold eight hypermarkets to its Japanese partner and the use of the Carrefour brand in Japan and the right to sell Carrefour private-label products in Japan.

Although Steve Barnes sees the demand for modern retail as an opportunity for China, India and Russia, he has also identified common challenges and issues that all retailer must take into account to go in these markets: the traditional trade still plays a key role; but there are problems of bureaucracy and infrastructures.

3) Carrefour around the world

Carrefour has to not only understand each national culture but also the staff which is the primary interface between its business and its customers in order to be able to penetrate new markets. Other factors need to be carefully managed: the local legislation (labour laws…). Understanding really the ways of living of these people is important: for example sales promotions “buy one, get one free” did not work in Japan because the majority of Japanese homes lack storage space and in general the Asian homes lack of domestic refrigeration.

2005 Operating Statistics:Total sales: 75,5 billion euros, an increase of 2,5 % over 2004.French operation sales fell 0,4 % to 35,6 billion euros.European operations (excluding France) increased 3,6 % to 28,1 billion euros.Asian operations increased 12,6 % to 5,7 billion euros.American operations increased 7,5 % to 5,1 billion euros.Source: Euro-retail flash, management ventures Inc.

In 2006, Carrefour plans to accelerate organic growth by opening 1,000 new stores, including up to 100 hypermarkets. The retailer expects to add a total of 1,5 million square meters of floor space.

A-Europe

The European food retail industry is the world’s most lucrative. It accounted for in 2005 37,6% of the global industry’s revenues. Moreover it generated in 2005 total revenues of $1,102 billion (Datamonitor). The emergence of higher-value products such as organic food and the development of new emerging economies like Poland are expected to boost the industry and the growth.

19

Carrefour is leader in Europe. The group is present in 13 European countries with a competitive landscape dominated by domestic companies such as Tesco, Schwarz Group and Aldi. The French market is dominated by Carrefour which generates almost 50% of its revenues in France. He has launched an aggressive price-cutting campaign using its own label brands. Carrefour is not present in the UK market because it is already a very competitive market which is dominated by the big four: Tesco, Sainsburys, Asda/Wal-Mart and Morrisons. The introduction of Wal-Mart and its considerable economies of scale through the acquisition of Asda have added pricing pressure to the UK food retail marketplace.

The retailers and especially Carrefour must stay competitive by cutting prices in response to the high level of competition within the industry. Nevertheless many of the West European markets are highly mature; this means that demand is relatively stable. Therefore in these kinds of stagnating markets, competition has intensified and much of it has concentrated on price. In order to reduce their costs and generate additional revenue, companies have developed (especially Tesco and Carrefour) online retailing. But this trend did not work very well in France whereas it is a success in the UK market. The discount sector has been the most dynamic area of the European food market in recent years and is continuing to expand at an impressive rate: hard discount leaders Aldi and Lidl continue their aggressive expansion. Face to these hard discounts, Carrefour had set its soft discount format (which is called ED).

B-Latin America

Carrefour is the first operator in Latin America with a presence in 3 great emerging economies: Brazil, Argentina and Colombia. Carrefour is active in 3 retail formats: Hypermarkets, supermarkets and hard discounters. But the extremely unstable economic situation of these markets can spark off the decline of the Carrefour’s expansion in Latin America. The economic crises which have touched recently these countries have boosted Carrefour not to be more present in Latin America and rather to invest in Asia.

C-Asia

Carrefour was the first international retailer to establish a presence in Asia in 1989, with a presence in 6 countries. Now the group is present in 8 countries. The Asia-Pacific food retail industry is become an increasingly attractive market in recent years. The increase in disposable personal incomes and increasingly busy lifestyles in developing nations such China and India have contributed to rapid growth of their food retail industries. By 2010, according to the 7th IGD 2006 annual conference about global retailing, China is expected to replace Japan as the leading contributor to the regional industry's value.

Asia-Pacific is the second largest market in the global food retail industry, accounting for 34.2% of overall revenues. The emergent economies will be the key growth drivers. Moreover the arrival of foreign competitors has allowed the development of many food retail industries in the Asia-Pacific region. Yet the environmental and cultural factors are playing an increasingly significant role in the more developed Asia-Pacific food retail industries. Health foods continue to grow in popularity in many Asia-Pacific markets.

20

China:

China is Asia’s second biggest retail market after Japan. China's population of over 1.3 billion and its rising levels of disposable personal income - among the salaried classes at least – have boosted food retail growth in the country. The major international players have not been slow in identifying the opportunities this climate enables. The two largest chains, Wal-Mart and Carrefour are both pursuing rapid expansion in China in an effort to solidify their regional presence: Carrefour has recently stated its intention to open ten new stores in China every year and Wal-Mart is currently engaged in a $1 billion-plus auction for China's Trust-Mart.Any retailers attempting to penetrate the Chinese market will need to be sensitive to the demands of local consumers. Wal-Mart and Carrefour has already worked in partnership with Chinese retailers due to the competitive advantage offered by local knowledge. One factor already working in Wal-Mart's favour is its low cost image, which could be important to its success: China remains a price conscious market, despite the emergence of an increasingly affluent - but limited in number - middle class.

According to the Commerce ministry (BBC, 2006), Carrefour sales in China rose by 25% in 2005: making it china’s ninth-biggest retailer by sales. Carrefour increased the number of its stores in China to 78 last year. But despite the growth in foreign investment, Chinese retailers remained dominant in their home market.

Moreover the 30th October 2006, Carrefour opened its 1000th overseas hypermarkets in China. This store, which is situated in Tonghzou near from Beijing, is the seventh in Beijing. Carrefour has opened its first Chinese hypermarket in 1995 and now it is present in 32 cities and the group is the first international retailer in China. It has 188 million of Chinese customers and its 2005 turnover was about $2 billion. Thanks to the increasingly Chinese purchasing power and a Chinese Growth Domestic Product (GDP) which has increased by 10%, Carrefour has succeeded to have a strong and steady growth. Therefore the company continues to build outlets in this interesting market.

However the non-national companies are bothered by the local government and partners (such as Chinese wholesalers). Carrefour had to adapt continually its strategy according to the local authorities. Today these authorities seek to develop western regions less economically developed than the coast. Carrefour must invest in these underdeveloped regions in order to can continue to build new stores in big cities like Beijing or Shanghai because it is these

21

authorities which permit the building of new stores. For the Carrefour president J. Duran (in Lauer, 2006), the main priority in china is to reinforce the zones in where the group is already present to benefit from large economies of scale. Thus Carrefour has to take care of its former stores which represent the base of its future growth face to the development of its main competitors the American retailer Wal-Mart and the British retailer Tesco.

Yet the growth brings about new issues especially in terms of human resources. The company has already 40,000 employees in china and it recruits each year 10,000 employees. This causes problems of training. In addition, in some regions there is one car for 70 people. Therefore Carrefour has to manage a free transport service for its customers.

What about India?The Indian food retailing industry is also witnessing rapid growth, even though small neighbourhood stores currently account for the majority of revenues due to foreign direct investment laws currently in place to prevent foreign players from owning a majority share in a food retail chain. Despite these restrictions, the Indian food retail industry is attracting growing interest from Wal-Mart and Tesco: both have been linked to a possible food retail joint venture with the Indian telecoms conglomerate Bharti Enterprises. Carrefour has not yet begun its Indian expansion due to the legislation.

D- The former countries

Czech Republic and Slovakia: Carrefour has opened its first store in 1998 in Czech Republic and in 2000 in Slovakia. In September 2005 Carrefour sold to Tesco 11 stores in the Czech Republic and 4 in Slovakia. Tesco paid €57.4 million and its stores in Taiwan.Japan: In 2005, Carrefour sold its 8 hypermarkets but announced a partnership with Aeon Japan.Korea: In 2006, Carrefour is selling its 32 hypermarkets to E-Land.Mexico: In March 2005, Carrefour sold its 29 hypermarkets to Chedraui.Chile: Carrefour sold its 8 hypermarkets in 2004 to D&S.

22

Section 6: Marketing Analysis

1)SWOT Analysis

As the second largest retailer in the world the company enjoys a strong brand image and economies of scale yet the company has seen stagnating sales in its domestic market of France in the last year.

Strengths:

Market leader: Carrefour’s leadership position in its three primary store formats helps the company maintain an advantage in the competitive retail market. Aggressive marketing and adaptable business model: Carrefour concentrates on sustainable local development: it trains its workforce in order to be able to conform to the local market. Its retail formats are easily adaptable in its various markets. The company has time and again the ability to adjust its retail formats according to the particularities of the different market, and this, coupled with its aggressive marketing ability, has helped the company grow in new markets.Brand recognition: Product positioning is planned in each of Carrefour’s stores and this has ensured good brand recognition in all markets in which it operates. Carrefour operates its stores under 17 banners. The company can boast of 90% brand recognition rate, with its own branded products accounting for 18% of its worldwide sales. The brand salience for the company is high.Focus on competitive prices: In each of its store formats, Carrefour maintains a strong focus on competitive pricing. In the hypermarkets segment, over three quarters of the company’s stores offer the lowest or the second lowest prices versus their local competitors. Carrefour focuses on offering competitive prices to customers.

Weaknesses:

Stagnant sales in France: France, Carrefour’s largest geographical market, accounted for 48% of the total revenues in the fiscal year 2005. However revenues from this market grew by a mere 0.1% during 2004. This is largely because Carrefour has a relatively poor pricing image in France. Losses for Ooshop.com: Carrefour operates its online shopping business, Ooshop.com, in both France and Spain. It is estimated that the business has accumulated losses in excess of 17 million euros in 2004. In times when internet shopping is gaining popularity, the company’s inability to profitably run Ooshop is a burden on its bottom-line.

Opportunities:

Strong growth potential in Asia: Given the high population in Asian countries and growing local demand, there is considerable growth opportunity for the company in the Asian region.New stores: Carrefour bought 26 stores in Greece from Xinosin in July 2004. The company also acquired 12 hypermarkets in Poland. Moreover in 2005, the company has opened 14 in Brazil, six in Colombia, five in Indonesia and three in Thailand. These new stores should help the company attract a larger number of customers and boost revenues.

23

Threats:

Stiff competition from discount retailers in France: Carrefour prides itself on its focus on price competitiveness. However, due to these discount retailers the company is suffering from a poor price image in its domestic market. There are increasing labour costs in Europe: Europe (including France) is the primary market for Carrefour, accounting for almost 85% of the company’s revenues. An increase in labour costs in its most significant market can adversely impact Carrefour’s bottom-line.

2)The BCG Matrix applied to Carrefour

Carrefour domestic market, France, has been able to serve as a cash generator for financing overseas expansion. Thus Carrefour uses its core business to finance its international strategy and to invest new policies. The role of the French market as a cash-flow generator for the overseas markets can be seen in the BCG-matrix. The French business acts as a cash cow transferring money to emerging markets in the hope of turning them into stars.

Stars: Asian emergent markets especially China,

Taiwan and Thailand.New European markets such as Greece,

Poland and Turkey.Latin-American markets: Brazil and

Argentina.

Question marks: are characterized by new emergent markets which need a particular strategy such as in

Colombia or in Malaysia.

Cash cow: Former European markets such as France,

Belgium, Spain and Italy.

Dogs: Japan, Mexico, Czech Republic and

Slovakia.

Stars: Stars consume and need cash flow. They concentrate the resources. Carrefour must invest massively in these markets to be the leader by acquisitions, enlargements of stores and new marketing strategies.

Cash cows: Cash cows are the stars of yesterday and they are the foundation of the company. They represent mature markets. Carrefour want to maintain its position in these former markets but it minimizes the investments and uses rather the cash flow generated by these markets in order to invest in other promising markets such as the Chinese market. Carrefour aims for a market leading position to enable economies of scale in logistics, buying and marketing.

Question marks: question marks demand high cash investments. They need cash flow to improve market share or to withdraw rapidly. Carrefour needs to understand, identify the needs, demands of these particular markets. It has to provide, communicate by using the best means and deliver customer value. Carrefour must choose the best tools to communicate the

24

value. The goal is to identify the customer expectations, to fulfil the customer needs by this mean, Carrefour creates customer satisfaction and as a result it creates customer loyalty.Carrefour is able to turn question marks into stars by investing massively.

Dogs: Carrefour aims for minimizing the number of dogs since 2005 by selling stores. It makes both mistakes of strategy and investments: it fails to understand these markets. It doesn’t use the best way to attract the customers and to penetrate these markets (Korea, Japan).

25

Section 7: Marketing Mix

As the second largest retailer worldwide, Carrefour has to be modified and adapted its marketing mix to foreign markets. Within each new market, it must find a combination of marketing environment and target markets that are different from those of its own home country and other foreign countries. Thus it is important that in international marketing, pricing, product, place and promotional strategies be adapted accordingly.

1) Price

“Price leadership remains a top priority”, José Luis Duran, chief executive, said. This quotation can summarize the Carrefour’s price policy. Carrefour has chosen to penetrate emerging markets, all characterized by a low GNP per capita. This implies that for these emerging markets price is a key competition factor. Thus the competitive landscape motivates a low-price strategy. In order to succeed with a low cost strategy, the cost has to be minimised. Carrefour aims for market leading positions in each of their overseas markets in order to be able to make economies of scale. Moreover it develops a pricing strategy called Every Day Low Prices (EDLP). In every country, consumers are becoming more price conscious. Therefore Carrefour has moved since 2005 to an EDLP type model which allows increasing sales volumes and costing savings. Efficiency savings are constantly sought in order to reduce cost. Consequently Carrefour is focusing on improving its back- and front-office operations and in particular on the following areas: Supply chain, sourcing, productivity, marketing and reduced property costs.

Carrefour’s Hypermarkets: Moving towards an EDLP-Type Model

Source: IGD Research

Furthermore in order to attract customers when Carrefour enters new markets, it develops another pricing strategy: promotional pricing. Promotional pricing is often practised when entering a new market in order to attract the new customers. (Kotler, 1996)

In 2006, Carrefour aims for cutting prices especially in France to compete with its rival. Like other French retailers, Carrefour has been affected by weakness in consumer spending caused by increasing fuel prices and an increasingly unemployment rate. That is why Carrefour wants to stay a price leader in Europe.

26

2) Product

In rapidly developing economies, such as the emerging markets of Asia and Latin America, there is a continuing trend towards large scale retail development. (Kotler et al, 1996) Carrefour’s stores are focused on offering a wide variety of products including food as well as non-food products. Moreover in emerging markets, customers would rather do their shopping at Carrefour than in other small local stores because Carrefour’s stores are attractive as regards to freshness and hygiene. Carrefour adds value by offering a large variety of products, all under one roof, in a store having a designed outlook for quality.

The company chooses to develop a varied product mix to respond more closely to customer expectations for instance areas of textile products, electronics and household appliances. Furthermore the best-selling brand in Carrefour hypermarkets is the Carrefour brand itself. The Carrefour products ensure quality and value rather than simply a cheaper alternative to branded products. Thus Carrefour products are purchased for the values that they convey. Carrefour own label can be a way of creating profile and enhance customer loyalty. Carrefour stores feature three ranges listed in ascending order of price. The main range is Carrefour, Agir and selection (80% of the product offering) which is immediately recognizable by their packaging and their colour code. This range embodies the group’s quality commitment.

Moreover to succeed in the new emergent markets, it is vital to produce a more local offer and thus to adapt its products’ ranges in each new countries in order to offer a variety of goods that local people want (Child, 2002). Cultural differences as regards to different tastes are important factors which must be accounted for (Challinor, 14/11/2006). It is important to keep abreast of changing local customer tastes in their new markets in order to stay ahead of the competition. Thus Carrefour adjusts its stores in each nation where it enters. Carrefour has to be able to understand these environments to building a successful international retail brand. The failure of Ikea in Japan shows the importance to understand the local ways of living (Challinor, 16/11/2006)

3) Place

Choosing where to locate its stores is a key aspect for retailers. Thus Carrefour has to take purchasing power, population density, competition and infrastructures into account.Local infrastructures and site accessibility are also factors which affect location decisions. In china and in other emerging markets most local infrastructure is still underdeveloped with poor roads and transport networks. An adequate access is a key for a successful implementation. Carrefour chooses to locate its stores where the population density is high. As a result it implants its stores in the city centre or near from the city centres for example in China Carrefour emplaces its stores around Beijing. It tries to be located where customer traffic is high.

Since 2005, Carrefour has chosen to be focused on a new kind of format: the convenience stores. Convenience retailing forms an increasingly important part of Carrefour’s multi-format strategy in Europe and beyond. They are present in Belgium, Italy and Greece. In Thailand, Carrefour is testing a convenience format in partnership with shell to increase small store format and to respond to the new Thai legislation.

27

4) Promotion

A promotion mix consists of a specific blend of advertising, personal selling, sales promotion and public relations aiming to persuade potential consumers to buy a product. As discussed earlier the key to build a successful retail brand across borders is the ability to understand local differences and then to understand what drives customer loyalty in each geographic market: the price, the service, the design, the quality, the brand, the value or the affinity.

Carrefour has chosen mainly three aspects: the price, the quality and the service. It uses several ways to attract potential consumers: for instance in China which is a country in which there is only one car for 70 persons, Carrefour sets up a free transports’ network characterized especially by a free shuttle service for its customers. It uses also sales promotions and it offers tasting of numerous products in order to permit to people to choose what they really want. It has chosen to develop the hypermarket format in Asia and especially in China because according to the marketing research, it has noticed that Chinese would rather make shopping in a big store in where they can find a large variety of goods.

Furthermore in Chinese, Carrefour is translated by “charefou” which means “happiness and prosperity” for the family. That is why Chinese people appreciate the symbol of these stores.Carrefour develops also a “Carrefour loyalty program” associated to a Carrefour loyalty card to serve the customers better and to respond to their expectations.

In addition Carrefour creates a particular policy in each country where it is: the “satisfaction or you money back” policy. This policy shows that Carrefour can ensure the quality of its products; it is a proof of confidence.

To attract more customers, Carrefour develops new promotion mix; for example there are seasonal renewals of assortments and product ranges, it organizes special events, special weeks with one theme such as the Fair trade or Christmas weeks. It offers a full range of products at cheap price during special promotional campaigns.

5) Personnel

Carrefour develops one policy concerning the personnel; its employees have to meet customers in person. Thus they are able to better understand the customers’ needs. Consequently Carrefour employs local managers and local workforce who are able to understand the local habits more than expatriates. These local employees are able to better advice the consumers. Carrefour develops a human resource policy: it develop recruit and train local people. For instance in china 99% of the workforce is Chinese people. “We created the Carrefour china institute in 2000 in order to train mainland Chinese staff to take positions of responsibility. And thanks to that, we have a lot of very good Chinese people today”, the president of Carrefour china said (2006). Moreover “it was a good, smart advantage that our main multinational competitors didn’t have”.

28

Section 7: Concluding remarks and recommendations for the future

One of the main Carrefour’s objectives is to continue its international expansion by strengthening its corporate image and adding sales area worldwide. As the second largest retailer around the world, Carrefour has endeavoured to respond to the customers’ needs and to understand the different cultures and tastes. Therefore it has a successful expansion in the emergent economies and especially in the Chinese market.

Despite this international success, Carrefour must not forget its French domestic market in where its price image needs still to be improved. Thus in 2007, one of the targets of Carrefour is not only to improve its price positioning but also to stay seen as a high added-value company.

Moreover although Carrefour’s expansion in these emerging markets offers growth potential, it also exposes the group to possible crisis such as the Latin-America crisis which has affected the Carrefour stores. Consequently it is well-judged to stop investment and expansion into this region until the economic conditions will be improved.

Markets with relatively stable economies can be considered as targets for the future. For instance an expansion into china offers numerous advantages even if Carrefour has now to compete with international strong retailer like Wal-Mart or Tesco. Carrefour can also turn into the Indian and Russian markets which represent the future giants. Many challenges lie ahead global retailers, there are considerable opportunities. The potential of India is one of these opportunities: when the restrictions on foreign direct investment are relaxed, it would cause an influx of foreign retailers to this $194 billion high-potential food retail market (IGD, 12/12/2005). There is also the potential of the new European members.

Thus in over 30 years of global experience, Carrefour has been confronted with great challenges. With its strategy it has solved its problems and maintained an outstanding position within the retail business until now. However Carrefour will have much more challenge in the future owing to the emergence of national retailers like Tesco or Metro. Moreover Carrefour has now to be confronted to the acquisition by Wal-Mart of the Chinese retailer Trust-Mart. This acquisition has considerably changed the competition’s landscape in China. Wal-Mart has ambition to threaten Carrefour’s global expansion.

29

Bibliography

Interviews:

Miss Christelle Alcuta, a former employee in Carrefour China, Beijing, China.Miss Malika Amara, a customer in Carrefour France, Paris, France.

These two unstructured interviews allow understanding the cultural differences between the Asian and European tastes and needs.

Newspapers:

Child, P (2006) “Lessons from a global retailer: An interview with the president of Carrefour China.”, The McKinsey Quarterly, 2006 special edition

This article which is in fact an interview with the Carrefour China president enables to understand the problems and the experiences of Carrefour in Asia and especially in China.

Couch, A (10/03/2006) “Carrefour to build stores and cut prices”, International Herald Tribune

This is based on the Carrefour’s objectives for 2006

Datamonitor (May 2006) “Global-Food retail”, Copyright Datamonitor 2006 © This analysis permits to have a large approach of the global food retail market.

IGD, (25/04/2005) “Carrefour Q1 results set the scene for 2005”, Copyright IGD 2006 © This article explains the Carrefour main objectives for 2006 and the results for 2005.

IGD, (16/05/2005) “Convenience more important for Carrefour”, Copyright IGD 2006 © This article explains that the convenience format is become profitable for the group.

IGD, (28/06/2005) “How is Carrefour’s operating model evolving?”, Copyright IGD 2006 © This article shows how Carrefour makes to cut its prices.

IGD, (12/12/2005) “IGD’s ‘Top ten of global Retailing’ 2005”, Copyright IGD 2006 © This article explains the main opportunities that the retailers in 2006 can met.

James, B (31/08/1999) “Carrefour is acquiring Promodès to create a European Powerhouse: Two giants in France join to fight Wal-Mart”, International Herald Tribune

This article explains the merge between Carrefour and Promodès.

Reuters, The associated press (28/04/2006) “Carrefour quits Korea”, International Herald Tribune

This analysis permits to understand the reasons of Carrefour for quitting Korea.

Visseyras, M (30/10/2006) “En chine, Carrefour ouvre son 1000eme hyper”, Le Figaro This is a French report about the opening of the 1000th hypermarkets in China.

30

Journal:

Breese, A (October 2001) “Grocery retailing – is it globalising?”, The INTAGE Global Services, Vol. 4

This article analyses the effects of the globalisation on the retail industry and especially on Wal-Mart and Carrefour.

Internet pages:

BBC News Business (10/12/2006): http://news.bbc.co.uk/1/hi/business/default.stm There are two articles about Carrefour’s international expansion:

“Carrefour boosts China presence” and “Tesco and Carrefour to swap shops”.

Carrefour Hypermarket in China and Italy: http://www.carrefour.com/cn and http://www.carrefour.com/it

Web pages very useful to find advertisements

Carrefour France-press releases (10/12/2006): http://www.carrefour.fr/revuedepresse Carrefour’s press releases

Carrefour France supermarket: http://www.carrefour.fr Carrefour’s France home page containing among other things company information

and year reports.

IGD: http://www.igd.com This web-page gives facts and information on all aspects of the food and grocery

industry.

The world fact book 2006: http://www.cia.gov/cia/publications/factbook This is an on-line publication of CIA’s which contains facts and figures about different

countries in the world.

Books:

Kotler, P (1996) “Principles of Marketing”, European edition, Prentice Hall

Bradley, F (2003) “Strategic Marketing in the customer driven organisation”, Chicester, West Sussex, Hoboken: J. Wiley

Lhermie, C (2001) “Carrefour, or the invention of the supermarket”, Vuibert

Hill, E and T, O’Sullivan () “Marketing”, 2nd edition, Longman modular texts

Kotler, P and K. L. Keller () “Marketing Management”, 12th edition,

Company reports:

Carrefour annual report 2005Tesco annual report 2005Wal-Mart annual report 2005

31

Lectures and seminars:

Challinor, S (fall term 2006) “ACE 3002, Strategic Marketing”, University of Newcastle upon Tyne

McGovern, T (fall term 2006) “BUS 3002, Business Strategy”, University of Newcastle upon Tyne

Conference Review:

IGD: Global retailing, 7th annual conference London, June 2006, reviewed by Nicoletta Occhiocupo

IGD: Wal-Mart and Carrefour as Home-region multinational by Alan M. Rugman et al. Copyright European retail digest ©

32

Appendix 1: Carrefour Chinese advertisement

33