Carrefour slows down behind

In the first week of September, reports that the media did not indicate the source claimed that Carrefour might withdraw from China and China Resources Group would take over. However, rumors were quickly denied. Carrefour China's public relations department told this newspaper that Carrefour will continue to maintain a store speed of 20-25 stores per year in China.

Behind the rumors, it is the fact that Carrefour is no longer in China. From July last year to now, the number of Carrefour's close stores in China has reached 6. Nearly Carrefour sources said that the internal staff turnover of Carrefour is serious and the pressure on corporate cost control is increasing.

Carrefour's mythological image of being the first to enter China in the retail industry is being broken. In the last two years, the rankings of retail companies have exceeded the strength of foreign-funded RT-Mart, the local CR Vanguard, and Dashang Group's comprehensive retailers.

In recent years, Carrefour has had difficulty in enjoying the super national treatment when entering China, whether it is taking land or opening a store. The cost of stores and logistics costs have been greatly increased. "It is very difficult to achieve the expected profit target according to the previous operating model." Nearly Carrefour sources said.

It is reported that Carrefour is adjusting its store-opening strategy. Although it still maintains a speed of 20-25 stores per year, the strategic focus has changed. First, it will focus on the development of second- and third-tier cities, followed by suburban cities in the first-tier cities and surrounding satellite cities.

The four stores closed by Carrefour last year were Dalian Xinhua Oasis, Xi'an Xiaozhai, Henan Jiaozuo, and Foshan Jiatianxia. It is reported that the reasons for the closure of these stores are poor location and poor management.

Carrefour China's public relations department said that Carrefour has a total of 180 stores in China. Closing non-profitable stores is a normal thing, but it is a strategic adjustment. However, people familiar with the matter said that the closure of Xi'an and other stores was mainly due to problems in site selection, and they were unable to seize the development opportunities in the local core shopping district.

In addition, the assessment made before the opening of the shop was not accurate, and the assessment of the surrounding business districts, people flow, and customers was inaccurate. At that time, some evaluations were considered to be residents' communities. As a result, the policy was later turned into an industrial base. The above-mentioned sources stated that Carrefour’s performance in China has been declining.

He to Xi'an shop as an example, the general sales of more than 200 million yuan a year to be flat, initially thought it was a bedding period, but the long-term no improvement, often in the 50 million yuan, is certainly a loss.

The source said that now Carrefour can only get in the non-core business district, especially in Shanghai, Beijing, such as Beijing Fourth Ring, basically impossible to get to the ground, because the cost will far exceed the operating budget. In Shanghai, at the same time, Carrefour and Bealead are both at the same time, Bailian will be given priority, and the policies will begin to favor domestic investment.

In one case, Carrefour currently has 180 stores in China, of which 99% are rented, while foreign companies such as Wal-Mart and Tesco are investing in real estate in China, but Carrefour is almost zero in this area. The first batch of stores signed by Carrefour in 1995 in China was a 20-year contract that expired in 2015 and had to face a huge increase in costs.

The chairman of a well-known local retailer believes: “In the past, foreign capital may have some advantages over domestic sources when it came to acquiring stores, because the local government hopes to attract merchants and offer many preferential policies. However, after a few years of market economy, the distribution trend In rationalization, competition is fierce."

Not only that, Carrefour’s problem of “entry fee” higher than the market average also made it fall into new trouble. At the end of 2010, the collective boycott of COFCO, Kangshifu and Jiusan Oil had caused Carrefour to become passive. According to unconfirmed data, Carrefour's profits in China account for more than 60% of its profits from upstream suppliers, which mainly include admission fees.

At the regular press conference held by the Ministry of Commerce on August 28 this year, the current spokesperson Yao Jian first mentioned this issue. He said that the question of the entrance fee reflected by Carrefour not only occurred in foreign-funded enterprises, but also In fact, China's manufacturing industry is developed and the service industry is lagging. Suppliers are asking for the reality of large-scale retailers.

On August 31st, Lars OLOFSSON, Chairman and CEO of Carrefour Group, announced the Carrefour semi-annual report. As the world's second-largest retailer, Carrefour made a net loss of 249 million euros in the first quarter. French media believes that Carrefour's restructuring in China will not be avoided.

Over the past year or so, Wal-Mart has increased its investment in China. RT-Mart has rapidly emerged and Carrefour's ranking in China's super-sonic retailers has been affected. In the top 100 chain rankings in 2009, Bailian Group, Dashang Group, and China Resources Vanguard Group, which have department stores, comprehensive supermarkets, etc., ranked 3 to 5 with 97.9 billion yuan, 70.5 billion yuan, and 68 billion yuan respectively. The overall strength in the country far exceeds Carrefour.

According to a person familiar with the matter, the large-scale suppliers have publicly criticized Carrefour and explained the changes in market position. The rules of the game have always been ranked first in retailers, and they have greater bargaining power when negotiating with suppliers. In the two years from 2009 to the present, the turnover rate of Carrefour China is also high. In June 2010, several employee-level employees in Eastern China resigned at the same time.

The most immediate pressure comes from Eric LEGROS, currently president of Carrefour China. People familiar with Luo Guowei said that this Frenchman always smiles, is very concerned about China's agricultural super-docking and food safety, and is willing to spend time practicing it. He is also unambiguous about the institutional reform in China.

Since he took office in China in 2006, Luo Guowei has been recognized as a reformist. He has a background in consulting and speaks with data. He is believed to have created an era of "rule of law." When Luo Guowei was in China, Carrefour China had faced the bottleneck of long-term decentralized management. At that time, the bribery scandals of shopkeepers and procurement staff continued.

At the time he was appointed to China, Luo Guowei implemented a series of centralized reforms including the reform of the CCU (City Purchasing Center), and gradually restored the manager’s power to the headquarters, which in turn suppressed the growth of corruption and saved costs, and also made the headquarters Store management is more direct.

In an interview with Chinese media, Luo Guowei also mentioned that although centralized reforms have encountered many disputes in China and have generated many doubts, they have been seeking the best balance between power and decentralization, and only need time.

According to informed sources, Luo Guowei himself is not familiar with Chinese culture. He considers things in the French way and never considers Chinese characteristics. For example, if a development manager wants to take a store and the report that he got back has a lot of “Chinese characteristics” in it, but Luo Guowei will calculate it according to the normal value, and the figures will be different. This will not work.

The person said, "After such a situation, he seldom hears you. After many employees encounter such a situation, they will become paralyzed next time. He will directly listen to his opinions and only implement them, but the problem is that In many situations on the Chinese market, Luo Guowei could not judge him, nor could he judge correctly.” “Luo Guowei's character is very confident and self-righteous, and he always thinks he is correct.” The person said that the French headquarters thinks of people who are not know. The latest news is that on August 22, Luo Guowei, the president of China, will step down. Thierry Garnier, former CEO of Carrefour's growth and development market, will become his successor, and he will assume the position of president of Carrefour Greater China. The appointment will take effect on April 1, 2012.

After the handover, Luo Guowei will be transferred back to the headquarters of the French group and promoted to become executive director of the Carrefour Group and president of the global merchandise department. This new appointment is considered to be the recognition of Luo Guowei’s “China Achievement” by the headquarters.

Solution: The above-mentioned local retail chairman stated that after the foreign retail business came to China, it was not the same as the site selection considerations in Europe and the United States. It would not be located in the outskirts of the city, because ordinary people did not have so many car owners to drive shopping. Therefore, they are all located close to residential areas and densely populated areas, near the Third and Fourth Ring Roads. Now the cost of rent in these areas has been overdone, and it is easy to get out of the lot and the speed of opening stores can only slow down. "Now, the general store in Beijing's Fourth Ring, rent is not 10 million -20 million can not get down, sales of about 200 million yuan is simply not enough, because we have to count the hydropower, labor, purchase costs and so on. He stressed.

In his view, the best solution is to quickly set up shop in second- and third-tier cities in the first-tier cities. However, profits will be smaller in second and third-tier cities, and growth will not be so fast. For example, a store in Beijing can achieve 300-400 million yuan a year, but the same scale in Tangshan can only be 100 million -200 million. The strategy adopted by Carrefour in the suburbs and in second and third-tier cities is very correct. Even domestic-funded companies now have this trend.

He emphasized that compared with Wal-Mart's increased investment in technical systems, Carrefour uses backward technology in high-tech, but rather spends more thought on marketing. Wal-Mart has already controlled costs through such methods as high-efficiency logistics systems and satellite information centers. The person familiar with the matter said, "Carrefour still depends on manpower, even local companies can not fight."