Carrefour SA, which pioneered the big-box supermarket combining food and general merchandise in the 1960s, has been stepping up efforts to fuse e-commerce and in-store shopping. Amazon.com Inc’s US$13.7 billion deal for Whole Foods Market Inc ups the ante for the French retailer.
Carrefour this month named a new CEO, turning to 44-year-old Alexandre Bompard, who has been leading electronics retailer Fnac Darty SA since 2011.
His mission, which is taking on additional urgency in the wake of the Amazon deal, is to expand his new employer’s online presence while revamping its tired “hypermarkets.”
Such stores have gone from being Carrefour’s backbone to its Achilles heel, struggling with competition from Amazon, as well as nimbler big-box operators like Societe d’importation Leclerc SA, discounters and higher-end grocers like Grand Frais.
“The hypermarket concept needs to be fundamentally rethought in terms of what it’s bringing to the market and in terms of differentiation from online,” Bain & Co retailer consultant Joelle de Montgolfier said.
French retailers, with Carrefour among the leaders, have been more successful in e-commerce. Click-and-collect services have flourished in France for more than a decade, making the industry more advanced in that respect than the US.
Carrefour has more than 500 sites where online shoppers can pick up their groceries, while Wal-Mart Stores Inc started introducing the option in 2014.
Bompard takes over as French President Emmanuel Macron, bolstered by a strong legislative majority, aims to loosen up the nation’s rigid labor market and stimulate the digital economy.
At Fnac, Bompard wowed investors by steering the retailer in a high-tech direction and by leading the acquisition of appliance chain Darty.
Together, Fnac and Darty’s e-commerce receive nearly as many visitors as Amazon in France, according to a study by Mediametrie and French e-commerce federation Fevad.
Shares of Fnac Darty roughly tripled since its 2013 initial public offering and digital prowess has spared it from going the way of Borders bookstores, which succumbed to Amazon.
Carrefour shares are trading about 70 percent below their 1999 peak as rapid growth in Brazil and the roll-out of smaller city shops have failed to compensate for investor concern over the French hypermarkets.
After the Whole Foods deal on Friday, Carrefour plunged along with other supermarkets, before rebounding slightly on Monday.
Even before the arrival of Bompard, who takes over on July 18, Carrefour has been trying to boost its e-commerce presence. Its more than 50 acquisitions since 2000 include organic food provider Greenweez and technology and home goods marketplace Rue du Commerce.
Online sales had a gross merchandise value of 1.2 billion euros (US$1.34 billion) last year and current CEO Georges Plassat has set a target of 4 billion euros annually by 2020.
With a digital-savvy new CEO, Carrefour could find itself on Amazon’s shopping list, Bryan Garnier analyst Xavier Caroen said.
“If worst comes to worst, provided that Alexandre Bompard does the job properly, Carrefour would be a target of choice for Amazon,” Caroen said in a research note.
‘BIG LOSS’: This year might see the last generation of Huawei’s Kirin chips, as their production would stop next month because they are made using US technology Chinese tech giant Huawei Technologies Co (華為) is running out of processor chips to make smartphones due to US sanctions and would be forced to stop production of its own most advanced chips, a company executive has said, in a sign of growing damage to Huawei’s business from US pressure. Huawei, one of the biggest producers of smartphones and network equipment, is at the center of US-Chinese tension over technology and security. Washington last year cut off Huawei’s access to US components and technology, and those penalties were tightened in May, when the White House barred vendors worldwide from using US
CORPORATE SCANDAL: Cathay Life has invested NT$13.3 billion in Bank Mayapada since 2015, but the latest loss of NT$8.8 billion has completely written off its investment Cathay Life Insurance Co (國泰人壽) yesterday said it would recognize an investment loss of NT$8.8 billion (US$298.1 million) in Indonesia’s Bank Mayapada Internasional Tbk PT due to concerns about the lender’s operations amid a corporate scandal. The company said it would revise its earnings result for June, from a net profit of NT$6.52 billion to a net loss of NT$520 million, its first monthly loss over the past 17 months. After booking an investment loss of NT$5.2 billion in Bank Mayapada earlier this year, Cathay Life has so far recognized total investment losses of NT$14 billion in the lender, executive vice president
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday reported that revenue last month expanded 25 percent annually, but fell 12.8 percent month-on-month to NT$105.96 billion (US$3.59 billion). In the first seven months of this year, the chipmaker’s revenue surged 33.6 percent to NT$727.26 billion, compared with NT$544.46 billion a year earlier. TSMC has said it aims to grow its revenue by more than 20 percent this year. The company has since May 15 stopped taking new orders from Huawei Technologies Co (華為), its second-biggest customer after Apple Inc, due to the US’ restrictions on exports containing US technologies. TSMC has no plans to
The US stock market has been on a tear, yet the country’s economy is in the dumps. So why do so many people believe — undoubtedly incorrectly — that the stock market has decoupled from reality? The economy many people experience, while bleak, is local, personal and, for the most part, either not publicly traded or plays only a small part in the stock market’s moves. To explain why these personal experiences have so little effect on equity markets, we must look more closely at the market role of the weakest industry sectors. The surprising conclusion: The most visible and economically vulnerable