(Reuters) - Carrefour's (CARR.PA) plan to open a premium
food store on La Madeleine square in the heart of Paris has raised eyebrows at
a time when Europe's largest retailer has vowed to cut prices to revive ailing
French operations.
The French retailer would be tapping into a niche market
that has largely escaped a squeeze on consumer spending due to its focus on
affluent shoppers and is attracting retailers around the world from Dairy Farm
in Asia, El Corte Ingles in Spain to Auchan in France.
But the plan puzzles those who believe the French
company, best known for pioneering vast "hypermarkets" and which is
losing market share at home, already has a lot on its plate.
"Carrefour is a strategic mess at the moment and
their direction seems to be changing by the day," said Natalie Berg, an
analyst with research firm PlanetRetail. "They should be purely focused on
fixing those self-inflicted problems such as price perception and availability
in their core hypermarkets rather than diversifying into risky, new business
areas."
Last month, Carrefour has said 2011 profit would slump 15
percent as it cuts prices in a bid to reverse falling market share and tackle
an increasingly tough economic environment.
According to the latest data from market research provider
Kantar Worldpanel, Carrefour has lost additional market share in France despite
promotions during the crucial back-to-school season running from August 8
through September 4.
A company spokeswoman recently told Reuters that the
future 3,500 square meter store, which will be located next to the famed
Hediard and Fauchon luxury food stores, would probably be named "Les
Halles de la Madeleine" and would offer fresh products, organic and
gourmet food as well as wine.
No opening date has yet been set for what Carrefour said
will be a one-off store.
Laurent Thoumine, Managing Partner at management
consultancy Kurt Salmon, said that Carrefour was seizing an opportunity to get
access to a prime Paris area, which generates a heavy traffic of affluent
shoppers.
"Carrefour is a multi-format, multi-products group.
This can work if the store is given enough autonomy and it will hardly disrupt
the rest of the group," he said, estimating Carrefour's capital
expenditure on the store at below 100 million euros.
Premium supermarkets run by large retailers have worked
better in countries, such as France and Belgium, that have a strong gastronomic
culture, analysts say.
Carrefour already owns a premium food store in Brussels
called Rob and domestic rival Auchan will be launching its Auchan Gourmand
store in the port city of Marseilles.
(Reporting By Dominique Vidalon; Additional reporting by
Pascale Denis in Paris; Editing by Jon Loades-Carter)
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