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Saturday, October 16, 2010

CARREFOUR HITS ITS TARGET THROUGH ACQUISITION


Given the difficulty in finding good sites, is acquisition the way forward?



Carrefour in China
It looks like Carrefour has laid to rest rumours that it was poised to sell off its China business alongside the rest of its South East Asia operation. 

These rumours come around every few years, usually along the lines that Carrefour needs to divest its international operations to focus on its core French business. 

However, the French hypermarket giant has just acquired 51pc of Baolongcang, the Hebei-based operator and has said BLC's existing 11 hypermarkets will be made over and reopened in November. 

That neatly lets Carrefour hit its target of 20 to 25 new stores in China each year, without having to find new sites and be held to ransom by property developers. The deal may signal a desire to move forward by acquisition, rather than just organic expansion. 

However, Carrefour is still stuck far behind Wal-Mart, which has nearly twice as many outlets, and is nervously watching Tesco gain pace, now that the UK store has taken complete control of its former joint venture. It will be interesting to see how the Hebei stores perform - Carrefour has just closed a store in Xian and one of its stores in Henan is also thought to be struggling.

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