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  • Essay / Carrefour - 1236

    Carrefour CaseThe first Carrefour store was opened in France in the summer of 1960. The concept of a one-stop shop at discount prices proved very effective because in France, in 1960, retail distribution was very fragmented and the product ranges in individual stores were very narrow. Visits to up to four separate stores were required to purchase all retail food merchandise. Carrefour has made the process of purchasing food products easier by creating a store where the consumer can find almost all the food products they need. Non-food products were later added to the Carrefour product range. In 1963, Carrefour opened its first hypermarket in France near Paris, selling food and non-food products at discount prices and providing parking for 450 cars. The high degree of consumer acceptance can be attributed to convenience and price. The hypermarket strategy proved very successful: between 1965 and 1971, sales increased by more than 50% and non-food items accounted for 40% of the total volume. In 1970, new stores were opened with a sales area of ​​up to 25,000 m². Carrefour's strategy was to build its store outside of cities, where highways provided easy access and land could be acquired very inexpensively. The combination of low-cost land and inexpensive construction gave Carrefour a total investment per square meter of sales space equal to around a third of that of traditional supermarkets. Another strategy was decentralized management. Each store manager had high decision-making power to manage their stores, making decisions faster, more dynamic and the day-to-day management of the store more efficient. Additionally, the manager could customize his store to better meet local needs. Decentralized operations have been a key success factor underpinning Carrefour's national achievements. In 1971, the growth of discount stores faced a huge problem in France, 40% of small retailers had disappeared due to the growth of large retailers and small retailers had significant political strength. in France this could not be ignored. In order to solve the problem of small retailers, the government found a way to slow the growth of hypermarkets by making it difficult to obtain planning permission for the construction of new large retail stores. However, this solution was not sufficient to keep small traders in business, so a law was passed in 1972 to tax retail stores in order to provide pensions for small traders who could not continue their business. All of these factors were obstacles to Carrefour's growth, but Carrefour managed to obtain two new building permits every year between 1960 and the early 1990s. 1970.