Carrefour France looks to drive hypermarket profitability | Progresiv
France-based trade publication Lineaires has reported on a number of initiatives being proposed by Carrefour as the retailer looks to support the profitability of its hypermarkets in its home market. 
Focus on non-food ranges
Lineaires said the strategy would focus on reducing the losses generated by its non-food ranges, with the publication saying they accounted for 68% of the sales decline for Carrefour’s French hypermarkets in 2018. The reports suggest that Carrefour will stop staffing household appliances, jewellery and its photo processing service itself in 2019, with a longer term plan to stop selling some of these categories.
Its trial with Darty will be expanded during 2019 to an additional three stores, while a similar trial will begin with Fnac. Following a disappointing trial following an investment in its garden offer, Carrefour could look for a third party to take over these areas too.
These steps will support its aim to reduce the space dedicated to non-food by 30% in its hypermarkets. The space reduction will be undertaken in 15 of Carrefour’s smaller hypermarkets, those under 8,000 sq. m, during 2019, with more involvement from third parties and shoppers being encouraged to self-serve themselves.
’Outlet concept’ to be extended
In 2018 Carrefour repurposed space, between 500 to 1,500 sq. m, in 11 hypermarkets to create outlet centres to sell off unsold non-food products at discounts between 30% to 80%. The trial has reportedly proved a success and will be extended to a further 12 stores in 2019. To create a more uniform offer and improve its impact, Carrefour is investigating how to optimise the distribution of this stock from other stores.
Further trials will be rolled out
Lineaires reports that Carrefour will also look to investigate further opportunities it is trialling for its pet offer and for a wider health and beauty offer. Existing trials around these concepts could be rolled out further if they continue to prove successful.
New models to be tested too
Carrefour is expected to continue the transfer of further stores to a lease-management structure, following the move of five hypermarkets in 2018. A further 10 or 11 stores could be transferred in 2019, where buyers can be found.
Elsewhere, new store models are to be trialled at about 55 underperforming hypermarkets:
- Essential: a low-cost model focused on providing competitive prices and a limited range of products merchandised on racks. This could be extended to 12 stores;
- Rebounds: more autonomy will be given to managers, who will aim to improve profitability. Five hypermarkets have been identified for this model during 2019, with 40 likely to be included ultimately;
- Next: about four hypermarkets will have their ranges adapted to give even more space to food. As part of this, space will be removed and more dine-in options will be added.
While online will play a bigger role too
Finally, Carrefour will look to expand the role its stores play in its omnichannel strategy. To this end it will begin offering home delivery from 90 hypermarkets, while also opening eight new Drives and enlarging a further 67 during 2019. (www.igd.com)
