Kantar: Carrefour should cut international portfolio to stay in top three in Europe

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Carrefour: sales tipped to decline

Group sales at Carrefour are expected to decline over the next five years and the retailer should divest its international portfolio if it is to remain a top three European retailer, according to analysts at Kantar Retail.

Carrefour’s future in markets such as Poland, Romania and Turkey is dependent on the retailer’s ability to deliver profitable growth. But retail analysts at Kantar Retail advise Carrefour’s on-going struggles in southern European markets (Spain and Italy) will continue to drag down overall group sales and could see the retailer falling from third to fourth largest retailer in Europe by 2018.

There is a more positive outlook for Magnit and X5 Group from Russia – both retailers are expected to deliver good performances with new store openings planned over the next five years and a focus on multi-channel formats. Magnit is expected to enter the top 20 at number 12 – a big leap from its position at number 25 in the ranking – and sales are estimated to more than double by 2018 to €34.9bn.

Leading retail analysts at Kantar Retail have reviewed the current ranking for European retailers and made 2018 predictions for the top 20 based on current sales and future plans.

Carrefour’s 2018 sales figures are estimated at €66.4bn – an increase of €5.4bn – some of which is based on improvements the retailer is making in its French hypermarkets.

A focus on pricing is also starting to show results – a recent Kantar Retail survey showed Carrefour was relatively cheaper than Auchan on a basket of 20 SKUs.

Carrefour’s CEO Georges Plassat’s initial performance has earned him the support of shareholders and since it divested several international businesses in 2012, the retailer is expected to concentrate its money on clawing back its prime position in France.

While the top 20 still ranks Schwarz Group as the largest retailer in Europe in 2018, it expects sales growth to have slowed to 4.3% during the next five years. This follows on from its aggressive expansion plan over recent years and Kantar Retail now expects the retailer to begin a period of consolidation.

Amazon is expected to be the biggest mover in the ranking, with an anticipated climb of 14 places to number nine by 2018 due to shopper loyalty schemes and constant innovation, said Kantar Retail.

Himanshu Pal, Kantar Retail’s director, retail insights, said: “Investing in the right areas can make all the difference to a retailer’s position in the European top 20. For example there are already visible signs of improvement at Carrefour stores now it is focused on price.

“But to regain its dominant position on the global, as well as the European retailing landscape, Carrefour should consider further divesting its portfolio to allow the overall business to grow. Magnit and X5 Group are proving the ones to watch as they are expected to move into the top 20 over the next five years due to store expansion plans and their focus on the financially constrained shopper – a growth opportunity in Russia.”

European Top-20 Retailers
*Source: Kantar Retail
A top 50 global retailer listing is also available.