This week brought the end of an era at Carrefour as chief executive Lars Olofsson was replaced by Georges Plassat, the head of French fashion retail group Vivarte.

Olofsson’s revival of the hypermarket concept failed to win public favour

Olofsson, a former Nestlé marketing executive, was appointed at the helm of the struggling business in January 2009. But just three years after his arrival in December 2011, sales fell by nearly 10% from the previous year, while operating profit collapsed by 20%.

Aside from international problems, which meant the company lost out on a major growth opportunity in Brazil and an executive reshuffle whereby Olofsson parachuted in an entirely new senior management team, the Swede’s direction in terms of hypermarkets in France was just not working.

Olofsson’s approach in France was out of touch with the more successful retail strategies introduced by Carrefour’s big-box competitors. Independent chains such as Leclerc and Intermarché have been gaining market share in France largely because of their focus on price. Carrefour, on the other hand, had kept prices fairly constant.

Rather than roll out the low-cost but hugely popular Drive formats, Olofsson decided to revive the hypermarket with the Carrefour Planet concept.

The ultimate flaw of that move was that shoppers were simply not looking for a better shopping experience – French consumers just wanted low prices and convenience.

New chief executive Plassat is nicknamed the the Cleaner.

He has bought brands such as shoe retailer Groupe André at a rock-bottom price and created a profitable business through two major restructuring programmes.

Having worked as chief executive of rival Casino and then Carrefour Spain, Plassat may have a better understanding than Olofsson of what French consumers want, and he has vital non-food experience that may help Carrefour’s struggling sales.

It is likely that Plassat will scrap Carrefour’s failed and rather expensive Planet initiative.

There are big challenges ahead of Plassat, and no doubt it’ll be a rocky road for him over the next few months. But his experience of dealing with private equity firms through Vivarte may make him the best man for the job in terms of dealing with and passing decisions through Colony Capital and Bernard Arnault, Carrefour’s most powerful shareholders.

For more information contact us on:

Tel: +44 (0)20 7728 5600

Email: info@planetretail.net