1. 2. History of the company Carrefour: hypermarket pioneer.
The origins of Carrefour date back to 1959 when the company was established in France by the Fournier and Defforey families. Carrefour opened its first supermarket in Annecy, then one successful shop grew into a chain from this first sales outlet. The shops were all located on thoroughfares, hence the name “Carrefour.” In other words, the name signifies that is convenient to shop there.
In 1963, Carrefour invented a new concept - the hypermarket. Based on an innovative idea, hypermarket determined as everything consumers needed could be found under one roof, displayed on self-service shelves allowed customers to compare products and prices. The first Carrefour hypermarket was opened in Sainte-Genevieve-des-Bois near Paris, with a sales area of 2,500 m square, twelve check out and 400 parking spaces.
In 1972, hypermarkets adopted the Continent retail brand and convenience stores operated under the Shopi brand.
In April 1976, Carrefour launched a private label Produits libres2 line of fifty foodstuffs, including oil, biscuits (crackers and cookies), milk, and pasta, sold in unbranded white packages at substantially lower prices.
In the 1990s, the internationalization of the company started to increase and new store were opened all over the world. Carrefour opened its first hypermarket outside France in Belgium and the first outside Europe, in Brazil.
In 1995 it merged with Promodès, known as Continent, one of its major competitors in the French market.
In September 2009, Carrefour updated its famous logo.
Now the world’s leading hypermarket chain permanently changes its formats to suit its customers’ lifestyles.
1.3 . Internationalization
Over the past 40 years, the Carrefour group has grown to become one of the world’s leading distribution groups with a presence in 32 countries, over 57% of group turnover derives from outside France3.
Carrefour primarily organizes its business segments based on geographic presence: France ofcourse; Europe (Portugal (under the Minipreco brand), Greece, Spain, Germany, Sweden, Austria and etc.); Turkey; Asia (China); and Latin America (Argentina, Brazil). In addition, the group's business operation can be segmented on the basis of its store formats.
Wherever it has a presence, Carrefour is actively committed to promoting local economic development. Since retail activities are all about contact with people, the group consistently emphasizes local recruitment plus management and staff training on the job wherever they work.
Typically, the Carrefour group is one of the leading private employers in any country where it operates. Naturally, this is the case for France, where the group was originally founded, but it is also true of such countries as Brazil, Argentina, Colombia, and Italy. The group also seeks to support local suppliers, with some 90-95% of the products on its shelves sourced locally, depending on the country.
Current locations-blue
Former locations-black
1.4 . Russian Retail Sector
Among the consumer-oriented sectors in Russia, retail occupies the prime place. The launch of modern retail formats, which replaced traditional store front businesses, was the beginning for this transformation. Some interesting statistics throw more light on the importance of the sector.
Monthly retail sales in Russia average about $50 billion, while the industry recorded revenues of $542.4 billion in 2010, which is 17.8 percent growth compared to 20094. Food retailers contributed to 48.6 percent of the total retail market turnover last year. According to Euromonitor, grocery retailers increased their share of store-based retail value sales in 2010 to reach 65 percent. The leading grocers reported the active development of low-end supermarkets. Internet retailing growth rates remained solid during 2010, exceeding the growth rates of offline retailing while still remaining a relatively small percent of the overall market. Internet sales increased 30 percent over last year and they are expected to double, according to Euromonitor’s forecast.
Figure 1. Russia’s Retail Turnover, $ U.S. billion
Source: Federal State Statistics Service (Rosstat)
Given the limited number of multinational players on the domestic market, Russian food retail continues to be led by large domestic retailers with annual turnover exceeding $2 billion. Russian retail giants such as the X5 Retail Group, Magnit, Seventh Continent and Dixie chains are still among the top5.
The biggest food retailer in Russia is X5 Retail Group. The company was formed by the merger of soft discount chain Pyaterochka and supermarket chain Perekrestok in 2006. Based in St. Petersburg, it runs over 1,500 outlets spread across Moscow and the Urals. After it had bought Kopeika, the retailer decided to go ahead to acquire Moscow-based grocer Ostrov. X5 has adopted the inorganic route to growth, beginning with its acquisition of Paterson supermarket chain in December 2009.
Today, through the development of a franchise on the Russian retail market works only leader of the industry X5 Retail Group. The company tries its hard in the opposite franchise in opening new stores Perekrestok and Pyaterochka. In contrast to the classical franchise scheme, where the franchisee partner pays royalties for the use of the brand and technologies of the well-known company, opposite franchise owner takes the networks of the goods for the implementation and earns commission on sales6.
Magnit OJSC is Russia’s second-biggest food retailer, which runs an expanding network of hypermarkets and discount groceries.
Another food retailer is O’KEY, Russia’s third biggest grocer by sales.. The company, which has been pursuing an aggressive expansion strategy over the past five years, operates more than 50 stores spread across 18 cities.
Since the beginning of the last decade, global retailers have been trying to gain a toehold in the lucrative Russian consumer market. Slowing sales in Western markets have lured big international players to seek expansion in fast-growing emerging markets such as Russia.
Germany’s Metro AG was among the early birds to arrive in Russia, setting up its first Moscow store in 2001. The retailer, which runs Metro Cash & Carry, and Real and Media Markt household appliances stores, operates more than 70 outlets in Russia. Around the same time when French retailer Auchan started operations in 2002 and currently runs more than 30 hypermarkets. Foreign suppliers continue to be competitive in Russia. Nationwide, retail chains occupy about 18 percent of the food retail market, but with higher concentrations in major urban centers (about 21 percent in Moscow and 48.3 percent in St. Petersburg, according to Rosstat).
