Topic > Carrefour - 1236

Carrefour CaseThe first Carrefour store opened in France in the summer of 1960. The concept of a one-stop shop with discount prices proved to be very successful as retail distribution in France in 1960 was highly fragmented and the product lines in individual stores were very narrow. Visits to up to four separate stores were required to purchase all the retail food merchandise. Carrefour facilitated the food purchasing process by creating a store where the consumer could find almost any food product he needed. Non-food products were later added to the Carrefour product line. In 1963 Carrefour opened its first hypermarket in France, outside Paris, selling food and non-food products at discounted prices and providing parking for 450 cars. The high degree of consumer acceptance can be attributed to convenience and price. The hypermarket strategy proved very successful and from 1965 to 1971 sales grew by more than 50% and non-food items accounted for 40% of the total volume. In 1970, new shops with a sales area of ​​up to 25,000 m2 were opened. Carrefour's strategy was to build its stores outside the city, in places where highways provided easy access and land could be purchased cheaply. The combination of cheap land and inexpensive construction has given Carrefour a total investment per square meter of retail space equal to about a third of traditional supermarkets. Another strategy was decentralized management. Each store manager had high decision-making power to manage their stores, which makes decisions faster, more dynamic and daily store management more efficient. Additionally, the manager could customize their store to better suit local needs. Decentralized operations were a key success factor behind Carrefour's national successes. By 1971 the growth of discount retail stores faced a huge problem in France, 40% of small shopkeepers had disappeared due to the growth of large retailers and small shopkeepers had significant political force. in France this could not be ignored. To address the problem of small shopkeepers, the government has found a way to slow the growth of hypermarkets by making it difficult to obtain building permits to build new large retail stores. However this was not enough to keep small shopkeepers in business, so in 1972 legislation was passed taxing retail shops in order to provide pensions to small shopkeepers who were unable to continue trading. All these factors were obstacles to Carrefour's growth, yet Carrefour managed to obtain two new building permits every year from 1960 to the early 1960s. '70.