Vol. 1 No. 6
October 2007
In This Issue:
Retailer Profile:
Carrefour CEO
José Luis Duran
GMA/FPA Industry Affairs Group:
Troy J. Beeler
Manager
Sales & Sales Promotion
Coordinator
Industry Affairs
Jeanne Iglesias
Director
Supply Chain & Technology
Brian Lynch
Director
Sales & Sales Promotion
Stephen A. Sibert
Senior Vice President
Industry Affairs
Pam Stegeman
Vice President
Supply Chain & Technology
Industry Affairs
Review Team:
Co-Founder
Planet Retail Ltd.
IAR Consultant
President & CEO
Singley Associates
IAR Editor
Carrefour CEO Focuses on Flexibility, Markets of High Growth
Carrefour: At a Glance
Key Operating Facts
Group Sales (Inc VAT) 2006
U.S. $109.7 Billion
Net Sales (Ex VAT) 2006
U.S. $ 97.7 Billion
EBT
U.S. $ 3,506 Million
No. of Countries
33
Top 3 Market Position
Algeria, Argentina, Belgium, Brazil, Colombia, Cyprus, Dominican Republic, Egypt, France, Greece, Guadeloupe, Indonesia, Italy, Jordan, Martinique, New Caledonia, Qatar, Reunion, Romania, Spain, Taiwan, Turkey, United Arab Emirates.
Key Formats
Hypermarkets and Superstores, Supermarkets, Convenience Stores, Discount Stores
Source: Planet Retail Ltd - www.planetretail.net
Having pioneered the concept of the hypermarket back in 1963, Carrefour has evolved into the largest retailer in Europe and the world's second largest – and one of the most international – retailers. Its hypermarket, superstore, supermarket, discount and convenience store operations span the globe from Europe to Asia, Africa to the Americas.
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CEO José Luis Duran |
Unlike his predecessor, Daniel Bernard, who earned the nickname “The Emperor” by the French press for his expansionist zeal, Carrefour’s current CEO José Luis Duran has adopted a more restrained, but nevertheless, determined strategy, reflecting his personality: “I am not proud of putting my banner anywhere, at any price.” Instead, Duran has announced that Carrefour will only be active in countries where it is among, or has the chance to become, one of the top three retailers. In this profile, we take a look at the man behind this new strategy. |
Married and 42 years old, Duran is the youngest CEO of the CAC 40. (A French index of the 40 leading French companies that trade on the Paris Stock Exchange.) In 2007, he won the prestigious Business Leader of the Future Award from CNBC Europe.
Descended from Spanish and German parents, Duran grew up in Madrid where he
attended a German school. An ardent fan of Atletico Madrid soccer team,
he studied economics at ICADE,
a top business school in Madrid, before launching his career in 1987 with
management consultancy Arthur Andersen in Spain.
In 1991, he joined grocery retailer Pryca (a subsidiary of Carrefour) as management auditor (1991-1994). Duran went on to serve as management auditor/Southern Europe (1994-1996) and management auditor/Americas region until 1997. He rapidly progressed up the ranks of Pryca, becoming chief financial officer and then chief financial officer for Carrefour Spain in 1999. In April 2001, he was appointed CFO and managing director of organization and systems for Carrefour, joining the group's executive committee.
In February 2005, José Luis Duran became group managing director of the Carrefour Group, and was appointed as chairman of the board of management in April 2005.
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One of Carrefour’s 101 hypermarkets in China, which it considers a growth market.
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Duran's strategy is to optimize Carrefour’s assets and dispose of non-core or non-profitable businesses. By doing so, Carrefour can concentrate its efforts on the countries and regions that offer the greatest profitability and growth potential. Growth in emerging markets – such as Brazil and China – has helped Carrefour to offset sluggish performance in its core, domestic French market, where it generates almost half of its global sales. |
In France it faces a highly competitive, price-driven market, with the discounters having a significant impact on the grocery sector. Elsewhere in Europe, competition is no less fierce with international operators vying for position both in developed Western European countries as well as less mature markets in Eastern Europe.
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Maxi Dia discount supermarket is new format for Spanish market. |
As part of Carrefour’s strategy to focus on countries where it has market leadership, it agreed to an asset swap with Tesco in September 2005. In exchange for Tesco’s six hypermarkets in Taiwan, Carrefour swapped its 11 hypermarkets in the Czech Republic and four hypermarkets in Slovakia. (The store swap in Slovakia was subsequently rejected by the competition authorities, with outlets sold to local operators instead.) |
With Duran at the helm of Carrefour, a greater sense of flexibility has been adopted by the retailer. Until recently, Carrefour's approach to internationalization had been a four-banner 'one size fits all' strategy (albeit with stores adapted to local markets) covering all major food retail formats – hypermarkets, supermarkets, discount and convenience stores, with the latter only in Europe so far). However, under Duran, Carrefour has experimented with new formats, not only attuned to individual countries, but to local communities as well. In Spain for example, it has converted all of its Champion Supermarkets to Carrefour mini-hypermarkets, Maxi Dia discount supermarkets or Carrefour Express soft discount stores.
Focusing on markets with high growth potential, an aggressive pricing strategy and flexible formats are all components of Duran's strategy to achieve a 10 percent increase in sales by 2008. Although these forecasts can perhaps be considered bullish – especially given sluggish hypermarket sales in France – one thing is certain: José Luis Duran could never be accused of lack of dynamism.
Industry Affairs News
Sales and Sales Promotion
Some 300 Industry Leaders Stress Importance of Shopper at MSM
The importance of the shopper was at the heart of the two-day Merchandising, Sales and Marketing Conference just concluded in Colorado Springs. From the SUPERVALU and Wal-Mart/Canada keynotes to the break-out sessions, speakers stressed how businesses are being transformed around the consumer and how insights from both manufacturers and retailers are being focused on shopper needs in convenience, value, variety and quality.
“It was evident from what more than 300 manufacturers, retailers and industry partners heard at MSM this year that the shopper is the key to all decisions being made today in the industry,” Stephen Sibert, Senior Vice President of Industry Affairs, said. “The consumer is more educated and informed today, and marketers are reaching them via means other than traditional mass-media methods, including use of everything from mobile devices to social networks.”
Presentations from this year’s conference will soon be available on the conference website.
Mark calendars for the 2008 MSM conference slated for the Vinoy Hotel in St. Petersburg, Fla., September 22-23.
Contact: Brian Lynch
Industry Spotlights Webinar, Launches New Coupon Guidelines
Is your company ready for the new system for the creation and processing of coupons that will be inaugurated in the industry January 1?
After years of joint industry cooperation and partnership, the Joint Industry Coupon Committee (JICC) has released the first new coupon guidelines since 1998. The guidelines support the implementation of the new GS1 DataBar coupons that go into effect in January 2008. The new coupon system for use in the United States will initially be rolled out in paper coupons. For a copy of the guidelines, which are sponsored by GMA/FPA, FMI and GS1 United States, please email Troy Beeler.
In other couponing news, JICC Committee Chairs Don King (associate director, advertising services, The Procter & Gamble Company) and Alan Williams (vice president, applications development, Ahold Information Services, Ahold USA Inc.) will highlight the changes your company will need to plan and how you can implement the new preferred coupons in a special webinar Oct. 9 at 11 a.m. (EDT). Click here to register for the webinar, for the audio portion call 1.877.864.7187 and enter meeting room number *7466229*.
Contact: Troy Beeler or for general DataBar questions you can email Couponquestions@gs1us.org.
Unsaleables Committee Meets Oct. 9-10
On the agenda for the Joint Industry Unsaleables Leadership Team at its meeting Oct. 9-10 is the selection of new committee co-chairs, plus planning for next year’s annual conference and benchmarking report. The meeting will be held at the Westin Hotel, Tysons Corner, Va.
Contact: Troy Beeler
Supply Chain and Technology
Input and Sponsors Sought for IS/LD Conference Planning
Have ideas for programs and speakers for the 2008 Information Systems and Logistics Distribution Conference in the spring? Email any program suggestions to Jeanne Iglesias or direct questions about the conference, which will be held Mar. 30-Apr.2 at the Westin Mission Hills Resort and Spa in Rancho Mirage (Palm Springs), Calif.
If your company is interested in becoming a sponsor for the event, please contact Jonathan Downey.
Contact: Jeanne Iglesias
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Logistics Committee Meets With FMI Supply Chain Committee
Members of the GMA/FPA Logistics Committee met recently with their counterparts on the Food Marketing Institute’s Supply Chain Committee to discuss programming for the co-located GMA IS/LD and FMI Supply Chain Conferences. Pictured at the meeting are Craig Hall, general manager/ice cream, Mars Snackfoods US LLC; Gerry Greenleaf, vice president/distribution, Hannaford Bros. Co., and Fred Housman, vice president/distribution, Hy-Vee Inc. Contact: Jeanne Iglesias |
Association News
Unified Association Web Site Launched
The two Web sites GMA/FPA has maintained since the merger January 1 have now been consolidated into one site with a new address – www.gmaonline.org. The unified site has the look of the former GMA Web pages, but information from the former FPA location has been integrated into the new Web pages.
Also new on the homepage is a “Today’s News” section with headlines affecting the food, beverage and consumer packaged goods industry.
The Web site will continue to be updated in the coming months to provide more information for member companies and Web-site guests.
Contact: Ginny Smith
Industrywide Initiatives
Kearney Launches Initiative to Develop Cold Supply Chain in China
A. T. Kearney Inc. recently launched an initiative to coordinate efforts by global food industry executives to work together to develop a workable cold-chain supply chain in China, a country where the current lack of a proper refrigeration infrastructure causes food safety concerns and economic loss for companies operating in the Middle Kingdom.
Kearney Senior Partner James Morehouse and Practice Leader/Consumer and Retail Michael Moriarty say to fix the food safety process in China will require collective action and more than $100 billion in supply chain investment. However, they point out that the payback will be worth it, since lack of refrigerated facilities and equipment today limits growth, costs companies more than $15 billion a year in losses, and poses an increasing food safety concern.
Pointing out that the Chinese market will equal that of North America and Europe by 2020, the Kearney spokesmen said the Chinese middle class alone will spend more than $650 billion on food by 2017 – a market U.S. companies cannot ignore.
If your company is interested in receiving more information on developing a national, end-to-end supply chain with third-party providers in China, please contact Morehouse and Moriarty at (312) 648-0111.
GMA/FPA Research
GMA/FPA Study Shows Sharp Rise in In-Store Shopper Marketing
A new study by GMA/FPA Sales Committee and Deloitte Consulting states that the fastest-growing medium for CPG companies is in-store, point-of-sale marketing.
The study found that spending on shopper marketing doubled among those manufacturers surveyed since 2004 and is expected to rack up a compound annual growth rate (CAGR) of 21 percent through 2010.
The just-released report notes that retailers are increasing shopper-marketing spending at an even faster rate of 26 percent CAGR, according to the eight retailers who participated in the survey. The retailers also reported that, despite the growing demands, they were increasingly limiting in-store ads and displays over the past two years to achieve a cleaner, more streamlined store appearance.
Entitled Shopper Marketing: Capturing a Shopper’s Mind, Heart and Wallet, the report examines current in-store CPG marketing, identifies current best practices and recommends strategies for future successful shopper marketing.
Of all survey participants, 30 percent gave principal responsibility for shopper marketing to their marketing and brand groups, 45 percent put it in sales, 15 percent in market research/analytics, and 10 percent had a separate unit for the responsibility or divided it among groups.
For a copy of the study, which was released at the MSM Conference, contact GMA's sales and sales promotions team.
Contact: Brian Lynch
Participate Now in 2008 Customer and Channel Management Survey
GMA/FPA and its partners IRI and McKinsey and Co. announce the eighth edition of the customer and channel management survey – the industry’s most comprehensive look at the winning sales force practices and performance benchmarks of leading CPG companies.
The survey is unique in that it links company practices directly to in-market results to establish best practices and quantify their value. All participating companies receive customized feedback of areas of strength and opportunity compared with leading industry performers.
The survey has brought together unique company practices and in-market results to the industry since 1978. The 2005 survey involved operating units in food and non-food from 29 countries.
Topics covered in this issue include key account coverage, new and emerging channels, broker management, integrated pricing/promotion strategies and shopper marketing practices.
On-line surveys will be mailed to participants in October with all surveys being completed in November. Debriefings around key issues will be held from March through June of 2008.
For more information, contact Brian Lynch at 202.337.9400 or blynch@gmabrands.com.
Contact: Brian Lynch
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New Research Says CPG Companies Gain $46 Billion from Sales Agency Outsourcing
Contact: Troy Beeler |
Outsourcing
sales and marketing functions to external food brokers has been prevalent
for many years in the CPG industry, but a just-released report covering an
18-month study period indicates that the trend is growing. The research,
Outsourcing Is In, says at the current levels of outsourcing, CPG
companies are realizing a economic value of $46 billion annually. Noting
that outsourced sales and marketing functions represent approximately 54
percent of all CPG retail sales in the United States today, or the
equivalent of about $133 billion, the report states that the trend is
expected to grow by 10 to 15 percent in 2007 and beyond. To download the
executive summary,
Associate Member Research
NPD: Foodservice Growth at Retail Outstrips Restaurants
Foodservice traffic at retail stores such as supermarkets and convenience stores posted stronger growth rates than any other segment of the restaurant industry, according to the NPD Group. For the past two years, foodservice purchases at retail outperformed total restaurant growth by a rate of 5 percent to 3 percent, respectively. The most frequent channel where consumers purchased prepared meals and beverages at retail is convenience stores (54 percent), followed by supermarkets (32 percent). The strongest foodservice growth, however, occurred in the discount stores and price clubs. For more information, visit NPD's press release.
Contact:
Caryn Portnoy
PRTM: Participation Sought in Study on Role of Operational Strategy in Global Companies
PRTM in cooperation with The Economist and its Economist Intelligence Unit is researching how executives drive competitive advantage through operational innovation. The study, called The Critical Role of Operational Strategy, has garnered wide participation across numerous industries, but CPG industry participation lags. PRTM Vice President Richard Miskewicz said if a large number of CPG companies would participate, the results would prove valuable to GMA members. Survey deadline is Oct. 15, and the link is available by clicking here.
Contact: Richard Miskewicz
IBM: Build Trust Through Traceability
Learn how full-value traceability creates transparency in the supply chain and can help your CPG company build trust from today’s “omni consumer” – an empowered and enlightened shopper who is concerned about product recalls and safety, about global sourcing and outsourcing, about health, wellness and environmental claims, and more. According to a new IBM study, the impact these concerns are dramatically affecting the food and consumer products industry. Click here for the full report.
Contact: Guy Blissett
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Oct. 9 |
Webinar Discussion of New Coupon GS1 DataBar Implementation Click here to register Contact: Troy Beeler
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Oct. 9-10 |
Joint Industry Unsaleables Management Committee Meeting Westin Hotel Tysons Corner, Va.
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Oct. 30-31 |
Industry Affairs Council Dinner and Meeting
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Nov. 9-11 |
Chairman's Advisory Council and Associate Member Council Meeting Grand Hyatt Washington Washington, DC Contact: Stephen Sibert, Jill Johnson
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Jan. 17-18, 2008 |
Environmental Sustainability Summit
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Mar. 30- |
Information Systems and Logistics Distribution (IS/LD) Conference Rancho Mirage (Palm Springs), Calif. Contact: Jeanne Iglesias, Liz Cookson
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@ Copyright 2007 by GMA/FPA, 1350 I Street N.W. #300, Washington, D.C. 20005. All rights reserved. Some content and copyright for specific information are provided and owned by Planet Retail, a leading provider of grocery retail intelligence— www.planetretail.net.
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