Carrefour invests 2.8bn euros in digital and plans China expansion

From: FoodBev

French supermarket chain Carrefour will partner with Chinese tech company Tencent and retailer Yonghui as part of a major global restructuring that sees an investment of €2.8 billion in e-commerce in the face of competition from Amazon.

Through the Tencent partnership, Carrefour said it will be improve its online visibility, increase the traffic of its offline and online retail activities and benefit from Tencent’s “advanced digital and technological expertise to develop new smart retail initiatives”.

The news comes as world’s second-largest retailer reveals its Carrefour 2022 plan, which is based on four pillars and will see 2,400 jobs cut at the group’s headquarters in Île-de-France to “improve operational efficiency of the teams and increase responsiveness”.

The Boulogne corporate headquarters will be closed and the planned project to build a new 30,000-square-metre headquarters in the Essonne department will be abandoned.

A cost-reduction plan of €2 billion on a full-year basis by 2020 is to be introduced, which includes the closure of 273 ex-Dia supermarkets.

Carrefour said it aims to be a leader in food e-commerce with the €2.8 billion investment in digital by 2022 as it targets turnover in food e-commerce of €5 billion per year. Finally, it aims for one third of its turnover to be through Carrefour-branded products by 2022.

Carrefour CEO Alexandre Bompard said: “I have a great ambition for Carrefour: To become the leader of the food transition by offering our customers, every day and everywhere, quality and trustworthy food at a reasonable price.

“To do this and return to a conquering dynamic, we must revamp our model, by simplifying our organisation, opening ourselves up to partnerships, improving our operational efficiency, investing in our growth formats, building an efficient omnichannel model and developing our fresh and organic products offer, notably under the Carrefour brand.

“This is the meaning of the Carrefour 2022 transformation plan that we are unveiling today, and that the group and its employees will implement with ambition and determination.”

Speculation has been rising that following Amazon’s $13.7 billion purchase of US supermarket Whole Foods last year, the e-commerce giant is now looking to increase its presence in Europe. Yesterday, Amazon opened its first checkout-free supermarket, located in Seattle.

Carrefour operates more than 12,000 stores and e-commerce sites in more than 30 countries, employing 384,000 people.

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