Carrefour Case
Carrefour first store was opened in France in the summer of 1960. The concept of one-stop shop with discount prices proved to be very successful since in France retail distribution in 1960 was highly fragmented and product lines in individual stores were very narrow. Visits to up to four separate shops were required in order to purchased all retail food merchandise. Carrefour facilitated the process of buying food items by creating a store where the consumer could find almost every food product he needs.
Nonfood products were later added to Carrefour line of products. In 1963 Carrefour opened its first hypermarket in France outside Paris selling food and nonfood products at discount prices, and providing parking for 450 cars. The high degree of consumer acceptance can be attributed to convenience and price. The hypermarket strategy proved to be very successful and from 1965 and 1971 sales grew in excess of 50% and nonfood items accounted for 40% of total volume. In 1970 new stores were opened with selling area as large as 25,000 sq m.
Carrefour’s strategy was to build its store outside of towns in location where highways provided easy access and land could be acquired very inexpensively. The combination of low-cost land and inexpensive construction gave Carrefour a total investment per square meter of selling space equal to about one third of traditional supermarkets.
Another strategy was a decentralized management. Each store manager had high decision-making power to operate their stores, which make decisions faster, more dynamic, and the daily store management more efficient. Plus, manager could customize its store to suit local needs better. The decentralized operations were a key success factor underlying Carrefour’s ...