Carrefour’s acquisition of 224 stores in Taiwan runs counter to recent strategic retreats from international markets of many once-global food retailers. International expansion remains a viable route to growth for food retailers, but only if the lessons of the past can be learned.
The evolution of economies and industries often comes in waves and cycles. A veritable tidal wave of corporate activity came in the 1980s and 1990s, driven by internationalisation through mass-market retail.
This particular period can be best remembered by Sainsbury’s bizarre foray into Egypt. With the gift of hindsight, we see now that Sainsbury’s acquisition in this part of the world was something of an expensive mirage and I do not anticipate that new chief executive Simon Roberts will be buying tickets on the night boat to Cairo anytime soon.
Even so, geographic expansion remains a central component of retail growth strategies, both offline and online, as many businesses seek to build out their brand potential and operational capabilities in a drive to sustain growth. Furthermore, once they are quite mature in home markets, internationalisation is again a relevant potential route to revenue growth.
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