Mar 13, 2018
Carrefour Brasil plans to expand, considers purchases and partnerships
Mar 13, 2018
Carrefour Brasil, one of Brazil’s largest retailers, plans to aggressively expand its store network, and will consider acquisitions and partnerships as part of that drive, executives said on Monday.
Overall, the company plans to open 20 wholesale stores in 2018, 10 Carrefour Market stores, and 20 Carrefour Express convenience stores. It also plans to convert five to seven hypermarkets into wholesale stores this year and has the potential for a total of 120 to 140 new stores by 2022, the executives said.
“We have the potential to do our work in 80 to 85 cities,” Roberto Mussnich, head of Carrefour Brasil’s wholesale division, told investors and analysts at the company’s annual investors’ day in Sao Paulo.
The expansion plans, particularly in the wholesale Atacadao format, reflect the company’s ambitions to gain and consolidate market share as Brazil’s food retail market turns a corner on the backside of a years-long recession in Latin America’s largest economy.
The company, the Brazilian unit of France’s Carrefour SA, is seen as fighting head-to-head with Brazil’s GPA, a unit of France’s Casino Guichard Perrachon SA, which is also expanding aggressively.
Speaking to journalists, Carrefour executives said they were open to non-organic expansion options, such as entering into franchising agreements or acquiring high-quality regional players.
“We don’t have any barriers set up. ... A franchising model in supermarkets is possible. We’re open to everything,” Chief Executive Officer Noel Prioux said, adding that the company has“identified potential partnerships.”
Regarding WalMart Inc’s Brazil operations, which are on the block, Prioux said he needed more clarity about the structure of the sale process before Carrefour Brasil could say if it was interested in any part of the retailer.
Two sources with knowledge of the Walmart deal said Carrefour had been consulted by Goldman Sachs on the deal, and was not interested.
Three buyout funds, Advent International Corp, GP Investments Ltd and Acon Investments delivered non binding bids. One of the private equity bidders may divide Walmart Inc’s operations in Brazil and resell them in parts, Reuters reported.
At the investors’ day, executives also emphasized Brasil Carrefour’s focus on expanding its e-commerce and digital footprint.
The retailer plans to offer at all its locations in Brasil by the end of 2018 the option to purchase items online and pick them up in person at a Carrefour store, said Paula Cardoso, head of Carrefour Brasil’s financial division.
She said the retailer is negotiating with 95 vendors to sell on the company’s online“marketplace,” which will offer customers more than 120 product categories.
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