Carrefour's Misadventure in Russia
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Case Code: BSTR363 Case Length: 16 Pages Period: 1996-2009 Pub Date: 2010 Teaching Note: Available |
Price: Rs.300 Organization: Carrefour SA Industry: Retail Countries: Russia, France Themes: International Business |
Abstract Case Intro 1 Case Intro 2 Excerpts
"In the space of just four months, Russia has gone from a "strategic priority" to an afterthought at Carrefour, the giant French retailer."
- New York Times, in October 2009.
"Carrefour's pending exit underlines the fact that Russia remains a highly challenging market despite its fundamental draw. Although MGR (Mass Grocery Retail) sales are forecast to strengthen by a dynamic 66.4% to RUB 1,423bn (US$ 48.53bn) through to 2014, the country's business environment is among the least forthcoming in emerging Europe. Despite topping our Q110 food and drink regional business environment ratings, Russia's market risks score (encompassing regulatory environment and barriers to entry) is the region's second lowest behind Ukraine."
- Business Monitor International, in October 2009.
Carrefour Exits Russia
On October 15, 2009, just four months after opening its first store in Russia, France-based Carrefour SA (Carrefour), the second largest retailer in the world, announced that it planned to exit the Russian market.
The company announced, "Carrefour has decided to sell its activities in Russia and pull out of the market, given the absence of sufficient organic-growth prospects and acquisition opportunities in the short- and medium-term that would have allowed Carrefour to attain a position of leadership. This decision is consistent with the Group's strategy which aims at building leadership positions that will ensure strong and lasting profitable growth."
Carrefour started the groundwork to enter the Russian market in 2007, looking out for suitable locations for opening its stores. It opened its first store in the country, a hypermarket, in June 2009...
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