Carrefour seeks closer Thais

Related tags Retailing Carrefour

Carrefour is to focus on its popular hypermarket format in
Thailand, even though new governement regulations there could make
it harder to expand in the future. The group hopes to open four
outlets there in 2004, taking its total to 23.

After a relatively quiet period, focusing on maintaining and growing underlying sales at a time of extreme fluctuations in exchange rates, Europe's biggest retail group Carrefour​ is once again on the expansion trail in Asia.

Already this month, the French group has unveiled plans to develop its operations in Japan and Korea, and this week it has given more information about what it hopes to achieve in the Thai market, one of its most important in Asia.

The company's hand has been forced somewhat by new 'zoning' legislation which will make it far harder to expand the number of stores there in the future.

The new rules require large retail stores (1,000 square metres and bigger) to be built no closer than 15 kilometres from commercial town centres, in a bid to protect local retailers from being priced out of the market. Similar restrictions have been drafted for medium sized businesses (300-1,000 square metres).

Carrefour's strategy has traditionally been to roll out a number of formats in each market where it operates, from hypermarkets to convenience and discount stores, but in Thailand the chain will concentrate on its popular hypermarket format, even though the restrictions on this kind of store development will become tighter in the future.

The head of Carrefour's operations in Thailand, Luc Dayot, said that the retailer planned to expand its hypermarket business there through both acquisitions and new store openings, with up to four stores planned there next year alone - twice as many as in 2003.

Thailand will become a major priority market for Carrefour in the future, with significant potential for further hypermarket growth, according to Dayot: France, which has a similar population to Thailand, has 1,000 hypermarkets (and tough planning laws to boot), while the Asian country has just 62, of which 18 belong to Carrefour following the opening of a new store there this week.

With 140 hypermarkets in Asia, Carrefour is the biggest foreign retailer there, with Taiwan (29 stores), China (41), South Korea (27), Indonesia (11), Malaysia (7), Japan (5) and Singapore (2) its other markets.

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