Earlier this morning, French retail giant Carrefour unveiled its five-year transformation plan, dubbed 'Carrefour 2022'. Alexandre Bompard, Carrefour chief executive had plenty to say about the new strategy; you can recap everything that was discussed in our exclusive live blog below. [Subscriber only - for details on how to sign up, click here]
09.00 CET
Welcome everyone to our live blog of the Carrefour transformation plan, which we now know is called 'Carrefour 2022'. Under the plan, Carrefour will seek to cut some 2,400 jobs from its head office, increase its food e-commerce turnover to €5 billion, and develop new partnerships in both Europe and Asia. Let's see what Alexandre Bompard, Carrefour chief executive has to say about the group's ambitious plans...
09.04 CET
It's a full house at Carrefour headquarters as you might expect...
09.08 CET
Carrefour is an "incredibly powerful company", says Bompard, adding that "right from the beginning, Carrefour was based on an 'all under the same roof' concept...
09.12 CET
Competitive landscape has seen a "brutal transformation", says Bompard. Carrefour's customers want "better, faster, cheaper", and the customer path is "more fragmented than it used to be"...
09.14 CET
"We failed" when it came to Carrefour Drive, says Bompard, who adds the group did "not invest enough in the format". In addition, distribution costs across the group have "exploded" in the past four years, to now account for 20% of total costs.
09.18 CET
"Carrefour needs to be a leader in 'food transition'," says Bompard. "I believe our group is able to succeed and manage this transformation..."
09.23 CET
Interesting observation from Twitter user @cleverhedge
#Carrefour mentions #blockchain ... stocks goes up +4% at the open
— Clever Hedge (@cleverhedge) January 23, 2018
09.27 CET
"We need to change our organisation," says Bompard. "Carrefour has swayed between periods of centralisation and decentralisation [...] the group is operating as if there are no synergies between each of the departments"...
09.29 CET
When appointed as CEO, Carrefour was burdened with "too many projects", and the group has abandoned some 500 projects as part of streamlining process, Bompard says. Carrefour is too "top heavy", the "size of our head offices are disproportionate"...
09.31 CET
Voluntary redundancies to commence "this summer", Bompard says...
09.33 CET
Here they are... the 'four pillars' of Carrefour's future growth...
09.36 CET
Cost structure is "unsustainable" in the long term," says Bompard, who wants a "deep change in method" when it comes to purchasing, supply chain optimisation...
09.37 CET
Many DIA stores were not able to "find the right model to meet the needs of their catchment area [...] we have no other choice than remove from our assets the DIA stores that are in real trouble," says Bompard, who adds that the Carrefour Contact Marché brand will be wound up...
09.39 CET
"We are looking for investors [to purchase the 273 DIA stores], but if we don't find investors we have no choice other than to close the stores," says Bompard...
09.41 CET
The hashtag #carrefour is now trending in Paris...
#carrefour est désormais une tendance dans #Parishttps://t.co/mly0oBFZwO pic.twitter.com/WkEypWIL3a
— Trendsmap Paris (@TrendsParis) January 23, 2018
09.43 CET
"We have to reduce the size of our hypermarkets where they are disproportionate to the catchment area", says Bompard, who adds that the group will look to convert unused space to 'dark stores' to meet the needs of its growing online platforms...
09.46 CET
On convenience stores, Bompard says that Carrefour "will step up the remodelling of its urban markets, capitalising on the success of formats in Spain and Italy". He adds that the 'Bon App' banner is "not working", and the group will need to "revisit it"...
09.48 CET
On e-commerce, Carrefour will develop a "single merchant website in each of our countries; in France this will be Carrefour.fr - a single, general purpose brand that is identifiable"," says Bompard. The Ooshop brand will "disappear altogether"...
09.50 CET
Analyst Bruno Monteyne of Bernstein Research has weighed in on Carrefour's results, saying, "The five year plan is centred around four pillars: simplifying the organisation, productivity and competitiveness gains, investing in online and improving the food offer. In its detail, the plan ticks all the right boxes. The key remaining questions not in the release that we will be looking out for in the presentation: how much margin investment will the plan cost (guidance 2018)? How long before sales trends in hypermarkets will improve? and will we see an improvement to the management incentive scheme?"
09.58 CET
Announcing plans to increase organic food sales to €5 billion by 2022, up from €1.3 billion currently, Bompard said, "we want organic food to be democratised across the markets in which we operate [...] We have to circumvent the impediments to organic, assess the accessibility and affordability of organic produce"...
10.00 CET
Carrefour wants one third of revenue to be from private labels by 2022, based around three pillars: "quality, co-constrction and traceability"...
10.02 CET
From Twitter user @PorcherThomas - while yesterday, people were celebrating Macron's creation of 800 jobs at Toyota, today, the news comes of 2,400 Carrefour redundancies; an interesting observation...
-Hier, tout le monde célébrait le génie de #Macron et la création de 800 emplois chez Toyota.
-Aujourd’hui, suppression de 2400 postes chez #Carrefour grâce à la #LoiTravail.
- Qui me trouve l’entreprise qui annonce aujourd’hui la création de 1600 postes pour combler le trou? https://t.co/kzmH5pI0eg— Thomas Porcher (@PorcherThomas) January 23, 2018
10.05 CET
Perhaps in response to rumours that Carrefour was considering pulling out of China, Bompard says "none of our territories will suffer a pullout [...] each of our territories will contribute to our overall growth." Recovery "will not happen unless France recovers", he adds...
10.09 CET
We're now on to questions from the floor - the first question is about Carrefour's decision to not close any hypermarkets while also maintaining profitability. "We truly believe that with this new plan [...] the situation can improve for all our hypermarkets and they can be better performing," says Bompard. "For those that are already in a good position, they will be even better"...
10.12 CET
Carrefour's food transition strategy now has an official hashtag, #TransitionAlimentaire...
« #Carrefour est à un tournant de son histoire. Devenir le leader mondial de la #TransitionAlimentaire, c’est notre cap. » #Carrefour2022 pic.twitter.com/l6ReBEvjgI
— Carrefour (@GroupeCarrefour) January 23, 2018
10.16 CET
Another question, this time on the timeframe involved in delivering cost reductions. "Some our actions are going to take a bit longer, relating to cost reduction of personnel," says Bompard. "But when it comes to renegotiating purchasing, and direct purchasing, we can move much faster."
10.19 CET
Question from the floor on Carrefour's decision to focus more on reinforcing the Carrefour name across its different brands. "The idea is to have Carrefour as visible as possible, because it is such a beautiful name for a beautiful brand," says Bompard...
10.22 CET
Question on the group's strategy in Brazil - is the group planning to cut costs, and if not, why is this not deemed necessary. "The head is to make this plan a global plan; it's not a country by country plan," says Bompard. "We believe that the whole group should share the same ambition, the same pillars." He adds that "country teams will determine how this plan will be implemented in each country"...
10.26 CET
Question on the group's partnership with Tencent in China. "I realised we were at a bit of a stalemate [in China], and the idea was to find the right partner to make headway," says Bompard...
10.30 CET
Question on price competitiveness, and the group's objectives in this area. While Bompard says that the group's precise pricing strategy is confidential, he adds that "we truly believe that piece competitiveness is a key element if you want to be attractive to customers. [...] All the investments we are going to make will allow us to gain in competitiveness. We need to think about the role of prices, the role of discounts and loyalty programmes"...
10.35 CET
Question on the group's future investment strategy. "We need to stop increasing the selling area of our hypermarkets if they are not profitable," says Bompard. "We want to adopt a strategy of selective investing, we think we can be more productive in our investment strategy"...
10.39 CET
Question on the potential job cuts that could come from DIA store closures. "The priority we have for the DIA stores is to try to find new investors," says Bompard. "If we do not find investors, we will have to close down the stores in question. If that happens we will have a redundancy plan to cover up to 2,100 employees, [...] Our ambition would be to save at least half the jobs"...
10.41 CET
A reminder about Carrefour's full year 2017 sales, which were posted on 18 January...
Carrefour sees slowdown in like-for-like sales growth in FY 2017. Understand: https://t.co/0vMOd0XYmC pic.twitter.com/HvhEubJceS
— ESM Magazine (@esm_magazine) January 18, 2018
10.51 CET
Question on where Carrefour positions itself in France relative to the competition. Bompard answers by that he is not "obsessed" with whether "over the next three weeks we will be gaining 0.1% or 0.2% in market share of our hypermarkets. We would certainly be able to organise that through non-profitable investment [if we wanted to], and you would be able to say that Carrefour is gaining market share." He adds that more than market share, what Carrefour is seeking to drive is the "percentage of customers that we can turn omnichannel"...
10.56 CET
On the number of women in executive positions within Carrefour, Bompard says that the group is "working hard" on improving the position of women within the company. "Its in our own interests to make this happen"...
10.59 CET
Bompard brings proceedings to a close. Undoubtedly the biggest talking point of the group's transformation plan, at least in a social media context, is its plans to shed 2,400 jobs from its head office; as Bompard noted during the discussion, a further 2,100 positions could be at risk if the group doesn't find a buyer for its DIA stores. The coming months will also tell a lot in terms of the implementation of the group's cost-cutting strategy. Thanks for joining us for today's live blog, we hope you found it interesting...
© 2018 European Supermarket Magazine – your source for the latest retail news. Live blog by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine.
