Carrefour: Activity in Asia Pacific

Antonia Branston, Senior Retail Analyst at Euromonitor, discusses the recent sale of Carrefour's stores in Thailand to Big C, an affiliate of Casino. Carrefour actually received more than the expected price of 1 billion dollars for its Thailand stores; the stores sold for a total of 1.2 billion. When the Thai stores went up for sale, Carrefour also put its Singapore and Malaysian stores on the market. However, Carrefour recently pulled these stores claiming the bids it received weren't attractive enough. This may be in part due to the larger than expected sale of the Thai stores, but Carrefour has stated it intends to grow in emerging markets.

Although Big C paid quite a substantial price for the Carrefour stores in Thailand, it hasn't particularly advanced in the rankings. However, if it can bring in as much sales in its newly acquired stores as its older stores, it should make a good step up in the market.

Tesco was the only company to express interest in all Carrefour stores in Thailand, Malaysia, and Singapore. Ironically, Tesco is a large competitor of Carrefour, but it's interest in the sale probably helped boost the price of the deal with Big C.

Branston explains her surprise that Tesco didn't express more interest in Carrefour's Malaysian assets, especially since the purchase would have helped Tesco challenge Dairy Farm International. AEON also could have raised its presence in Malaysia with the purchase.

Carrefour has a strategy of exiting markets where it doesn't have a chance to become the clear market leader, such as Thailand, Malaysia, and Singapore. Carrefour will most likely invest the sales of its Thai market into the Western European market, where is has been struggling as of late. It will also, most likely, invest in China and Indonesia. Carrefour is ranked 2nd in Indonesia, but the Indonesian market is attracting a lot of interest from grocery retailers. The Matahari chain of hypermarkets is up for sale, and Wal-Mart has been rumored as a potential buyer, which would create a whole new fight for Carrefour.

Branston concludes by discussing how Carrefour plans to expand its markets in Malaysia and Singapore, but expects that down the road Carrefour will improve these stores to make them more attractive for another round of bidding.

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• big C
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