Regular subscribers of our Food Industry Newsletter received a report on France’s Carrefour SA, the world’s #2 retailer, and how its CEO Lars Olofsson has been attempting to shed the chain’s reputation for being expensive.
Apparently The Wall Street Journal reads it: they then wrote about how Carrefour is trying to become the IKEA of grocers selling other companies’ brands leveraged against private label products.
The goal is to have private label products at lower prices (up to 50% lower) using a stock-management system developed in their China division targeted to reduce internal costs than €1bn (a strategy Walmart has used to reach the top of the retail food chain). Last year price cutting and promotions cut Carrefour’s operating profit by nearly €640MM ($830MM), so Olofsson is hoping to use lower prices to goose up sales volume, something that will let him strike better deals with producers and improve margins. At 3.2%, Carrefour’s are the lowest of all major retailers and half those of its competition (Wal-Mart and Tesco PLC).
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[...] wrote about Lars Olofsson‘s struggle to right the world’s #2 retailer back in 2009 and again last [...]