CARREFOUR China working to optimise performance

Planet Retail 17 Nov 2009

In China, like in France, Carrefour's hypermarkets are applying some adjustments to improve their performance, such as reducing inventory times, reported French magazine LSA. In China, inventory times have been cut from 29 to 22 days within a short space of time. "Reducing inventory times by seven days everywhere in the world would represent EUR1.5 billion (USD2.2 billion) of cash flow," said Carrefour CEO Lars Olofsson during an official visit to China. The operation, called Top 3, consists of optimising the space in the store room by transferring some of the cartons into the stores, above the shelves. These cartons give a discount feel to the departments and improve the price image of the hypermarket. In the store room, the unoccupied area can then be used for commercial purposes.

Prices of fresh products have been aligned to those offered at the traditional wet markets. The textile departments have also been inspired by the Irish textile discounter Primark. Tables display the products being promoted and there are large price signs. Buying is generally done directly as has been allowed since 2007. A law has authorised farmers to regroup into co-operatives enabling Carrefour to obtain the required volumes and quality, said Eric Legros, Managing Director of China. 95% of the assortment in Carrefour hypermarkets is procured in the country. Currently present in 25 cities, Carrefour now wants to expand into less dense cities and away from the east coast, like in Inner Mongolia where the retailer has two projects. Finally, to ensure its growth, Carrefour relies on its Carrefour China Institute which trains 500 employees at any given time, some of whom become store managers.

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