Carrefour to rebrand smaller stores

Carrefour Express stores will become Carrefour Markets as the world's second-largest retailer puts a focus on high-quality offerings.

Carrefour aims to entice customers with its Market brand in an increasingly competitive industry. Pawan Singh / The National

Carrefour may be known among local shoppers for aisles upon aisles of groceries in big-box stores, but these days the hypermarket is shifting focus to its smaller shops.

The world's second-largest retailer, after Walmart, has undertaken a national rebranding effort involving 16 of its Carrefour Express stores, which are being renamed Carrefour Market.

Products will be introduced on a store-by-store basis, spotlighting high-quality offerings such as freshly baked breads and butchered meats, in addition to produce.

The goal, says the company, is to change how customers perceive these smaller convenience stores so that they are associated with fresh ingredients and choice, rather than just a range of basic grocery items.

"Particularly in the Emirates, Carrefour is focusing on smaller stores to continue growth," said Vincent Verdier, an analyst and director at the consultancy Kantar Retail. "The opening of big 10,000 square foot markets will get reduced in the future. That's quite particular to the Emirates."

Carrefour aims to entice customers with its Market brand in an increasingly competitive industry.

Mr Verdier said Lulu was "becoming a bit more aggressive with their promotional activity and pricing" and Choithrams announced last June it would start opening smaller convenience stores in emerging residential developments in the UAE.

"Our customer demographic is constantly changing and evolving along with their requirements from a local supermarket," said Franck Rouquet, Carrefour's supermarket regional manager for the UAE, Qatar, Oman and Kuwait.

"The Carrefour Market model is already well established internationally, and we saw an opportunity to introduce it to the GCC, which is a region with huge growth potential for the company."Analysts said Carrefour's business overall had done well in the Emirates, thanks in part to its ongoing partnership with Majid Al Futtaim group. Last year, it held 8.7 per cent of the UAE's market share in grocery sales, up from 6.4 per cent in 2006, according to the market research provider Euromonitor.

But at the same time Carrefour's sales have been struggling elsewhere in the world. This month, the company warned that its earnings for the first half of the year would fall by about 35 per cent, with shares falling to a two-year low.

Then at its annual meeting in Paris last week, which was interrupted by disgruntled employees and protesters, Carrefour's shareholders approved a plan to spin off its discount unit, Dia. This portion of the business is set to be listed on Madrid's stock exchange on July 5 and has been valued at up to €4 billion (Dh20.84bn) by analysts. Dia does not have a presence in the UAE.

In Europe, the company has also earmarked €1.5bn to renovate its stores and roll out Carrefour-branded grocery items.