Carrefour: Managing the Global Supply Chain

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Case Details:

Case Code : OPER033
Case Length : 12 Pages
Period : 1990 - 2003
Organization : Carrefour
Pub Date : 2004
Teaching Note :Not Available
Countries : France
Retail ing

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Background Note

The first Carrefour (means crossroads) retail store was established in 1959 at the convergence of five roads in Annecy, near Paris in France, by Marcel Fournier and Louis Defforey. In 1963, Carrefour opened its first hypermarket³ in Sainte-Genevieve-des-bois in France. The hypermarket had a floor area of 2,500 square meters, 12 exit points and 400 parking points. Carrefour started its first global venture in 1969, by opening a hypermarket in Belgium under the brand name 'Champion.'

In 1970, Carrefour's share was listed on the Paris stock exchange, Paris Bourse. In 1972, the company opened its first stores in the UK and Italy.

In 1973, Carrefour opened its first hypermarket in Spain under the 'Pycra' brand while the first hypermarket in Brazil started functioning in 1975. In 1989, Carrefour opened its first hypermarket in Asia, in Taiwan. By the late 1980s, Carrefour had a significant presence in a major part of Europe and had established its stores in North America, South America and Asia.

In 1990, Carrefour diversified into the oil business by establishing 'Express Oil⁴.' In 1991, Carrefour acquired two French hypermarket chains - Euromarche and Montlaur. It acquired 'Felix Potin' (convenience store) in 1996 and 'Catteau' (supermarket chain) in 1997. The company had established a strong presence in international markets by the late 1990s (Refer Exhibit II).

To strengthen its presence in the domestic market, the company acquired the French retail group Promodes⁵ in 1999. This made Carrefour Europe's #1 retail company and second in the world behind Wal-Mart in terms of global revenues.

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3] A large retail store, that offers product at low prices. It is a combination of a discount store and a food-based supermarket. Typically, it spreads over 300,000 sq. feet and offers over 50,000 different items.

4] A reputed automotive company, which provides a wide range of car maintenance services. It is widely known for its express oil change services.

5] Promodes retail group owns 614 hypermarkets & supermarkets and 987 convenience stores in France. These include continent hypermarkets, Champion and Dia supermarkets and convenience stores trading under the names Shopi and Codec. Promodes Cash & Carry and wholesale chain trade under the Promocash, Negoce, Puntocash and Prodirest names. The company also has hypermarkets in Spain, Germany, Italy, Portugal and Greece. It is the second largest group in France and fifth largest in Europe.