Recession-related despondency is being tackled at Carrefour with the launch of a new marketing campaign for its struggling French operations.
Bearing the slogan “le positif est de retour” (positivity is back), the campaign is part of a programme to revitalise the fortunes of the group’s domestic hypermarket operations.
Addressing the widespread perception that Carrefour is a high-price retailer is a key priority and the group aims to put a smile back on the faces of its customers with a series of initiatives to make shopping at Carrefour a more positive experience.
During the first half of the year, Carrefour’s gross sales in France declined 4%. French hypermarkets, which account for a quarter of the retailer’s global sales, posted a 5.3% like-for-like fall, including petrol. Chief executive Lars Olofsson said: “There will be no lasting success if our base isn’t strong. France is at the heart of Carrefour.”
The group confirmed that it would be investing e600m (£514m) this year in growing sales and market share through price cuts, marketing and the store transformation programme. To offset the impact of this expenditure, it is aiming to achieve e500m (£429m) of savings in operating costs.
Carrefour’s price image is not the only difficulty it faces. The standardised, everything-under-one-roof approach to its hypermarket retailing has long been falling out of favour with French consumers. To combat this, Carrefour plans to overhaul its entire hypermarket network, enlarging the food offer, cutting back on non-grocery and streamlining the checkout process. It is also working on tailoring each store’s offer to better fit the local catchment through a category review.
However, domestic competitors have already begun to respond. On the same day as the launch of Carrefour’s positivity campaign, grocer Leclerc announced the introduction of the Garantie Promo card, offering to rebate shoppers the difference for any items they find cheaper elsewhere.
It is uncertain whether Carrefour’s strategy to invest in price reductions will lead to market share gains or merely further erosion of its margins. One thing is for sure, though: with Carrefour focused on saving e500m, international rivals Wal-Mart and Tesco will be taking the positives out of its predicament and readying themselves to pounce on any weaknesses the cost reductions expose.
➤Matthew Stych, research development manager, Planet Retail. For more information contact us on:
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