Carrefour's Exit from Singapore
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Case Code: BSTR439 Case Length: 12 Pages Period: 2013 Pub Date: 2013 Teaching Note: Not Available |
Price: Rs.400 Organization: Carrefour SA Industry: Retail Countries: Singapore Themes: International Business, Globalization |
Abstract Case Intro 1 Case Intro 2 Excerpts
Background Note
In the early 1950s, the grocery industry in France consisted mostly of family-owned stores and a few big departmental stores that charged exorbitant prices. At that time, the concept of free service was gaining popularity but very few stores in France were equipped to allow shoppers to help themselves by providing them with trolleys, displaying the items conveniently, giving them access to the items, etc. In 1959, two entrepreneurs from Annecy in Eastern France - Marcel Fournier (Fournier), a textile retailer, and Louis Defforey (Defforey), a wine and food wholesaler - decided to establish a large discount supermarket. Initially they offered 7,000 shares to ten stockholders and purchased a facility that was under construction.
The duo decided to start a supermarket on the ground floor of the building. They had sold the upper floor to generate revenue to run the business. Fournier was the president of the venture and Denis, son of Defforey, was the General Director of the venture. The venture was named Carrefour (Crossroads), as the store was located at the convergence of five roads at Annecy. At the same time, another businessman publicized his intention of launching a mega retail store at Annecy. So Fournier and Defforey decided to open a store at another location in Annecy as the facility was still under construction. As the threat of competition was looming large, the duo began offering products at the lowest prices. Soon the stores became very popular among customers.
Before the store opening in Annecy in 1960, a campaign was launched to familiarize customers with the concept of supermarkets. This was highly successful and in the first two days Carrefour attracted more than 15000 customers. To accommodate the vehicles of the customers, Carrefour expanded the parking lot. But that was not enough to satisfy the growing customer traffic to the store. Traffic jams were reported with in the vicinity of the store. The founders soon had to grapple with the challenges of managing a supermarket in a congested urban area. So, they decided to open a supermarket in Cran-Gevrier at Annecy. It had a large parking lot and a discount service station that sold petrol on a no-profit no-loss basis....
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