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Carrefour Overhaul Signals Further Shift Online

Carrefour Overhaul Signals Further Shift Online
From WWD - January 23, 2018

PARIS Carrefour SA is moving further into online commerce as its struggles to secure a future in a world dominated by internet retail behemoths Alibaba and Amazon.Presenting its overhaul plans for the first time since chief executive Alexandre Bompard took over the company last year, the French retail giantthe worlds biggest after Walmart Stores Inc.signalled that it will focus on improving delivery of products through online channels.The efforts to adapt the business to changing consumption habits will include bolstering the network of convenience stores in cities, reducing the size of its sprawling big-box hypermarket stores and forging partnerships with other retailers. At the same time, the grocer wants to cut costs by two billion euros a year by 2020, with staff cuts and moving its headquarters. Meanwhile, annual investments in the digital sphere and the supply chain will be set at two billion euros, starting this year.Carrefour came up with the hypermarket model in the Sixties, selling an array of household goods and groceries in the same, sprawling space out in the suburbs. But in the past decade, the retailer has been slow to adapt, as consumers increasingly turn to the convenience of smaller stores that are closer to home.The swift rise of Amazon and Alibaba has further challenged the model, and so has lackluster consumption in its home market. The retailer, which has looked abroad for growth, also has a large presence in Brazil and China, but France continues to account for nearly half of its sales.Bompard is embracing alliances as a way to reinforce Carrefours position, and the company Tuesday also announced a new partnership with Tencent, a Chinese internet services company, which will take a minority stake in the French retailer.In recent months, Carrefour bought a stake Showroompriv, forging an alliance with the online retailer. Carrefour also struck an agreement with French retailer Fnac-Darty, Bompard's previous employer. As ceo of that company, Bompard orchestrated the merger of the books and electronics retailer with a company selling home appliances.

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