Carrefour sees growing market in private-label items

By Jerry Lin  /  STAFF REPORTER

Tue, Jul 15, 2008 - Page 12

French retailer Carrefour (家樂福) says sales of its 3,000 private-label products, which are on average 10 percent to 30 percent cheaper than the leading brands, grew 30 percent year-on-year in the first half of this year .

Carrefour Taiwan’s private-label lines in daily necessities, such as toilet paper and cleaning products are already very complete so it will focus in the second half of the year on developing food products because food items have been directly affected by rising commodity prices, the company said yesterday.

“Carrefour will focus on fresh produce, which is currently lacking in our private-label products, because that is the most difficult area to save money on,” said Dream Lin (林夢紹), Carrefour’s public relations manager.

Carrefour, which operates 48 stores nationwide, said that its private-label products account for less than 10 percent of its sales in Taiwan, but it hopes to double that in the next three years.

“Unlike the UK and France, where private-label products began developing in the 1980, and penetration rates have now reached between 20 percent and 30 percent, the development of private-label products here in Taiwan has been more recent,” said Loic Percheron, Carrefour’s private brand manager.

Carrefour’s major local original equipment manufacturers (OEM) include the nation’s leading soy sauce manufacturer, Kimlan Foods Co (金蘭食品), and paper manufacturer Cheng Loong Corp (正隆).

Carrefour plans to open 10 more stores in Ilan, Touliu City, Yunlin County, Taitung and other areas in the second half of this year, which will give it a total of 57 stores and leave local rivals RT-Mart (大潤發) and Far Eastern Geant (愛買) lagging far behind.

Carrefour’s revenues in the second quarter grew 2.3 percent from the same period a year ago, slightly down from the first quarter’s 4 percent growth, but company officials said they were confident of expanded growth in the second half of the year.

In related developments, Far Eastern Geant — the nation’s third-largest hypermarket chain with 14 stores nationwide — said that the establishment of “fair price areas” in its outlets on June 5, which offer discounts of up to 43 percent off normal prices, have helped it boost its overall sales by 20 percent, while sales of its “fair price” toilet papers, salad oil and milk powder have grown by nearly 100 percent.