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Pundit’s Mailbag — Carrefour Hires Tesco Exec While Deloitte Says Tesco Loses 3rd Place Global Retailer Ranking To Metro

Jim Prevor’s Perishable Pundit, February 9, 2010

Today’s Mailbag brought a note from a distant friend:

Greetings from Indonesia.

Two interesting bits of info that I wanted to pass on.

I know that you have occasionally mentioned Carrefour even though they are not active in the United States.

But I thought, especially in light of your attention to Tesco, you would find it interesting to see that James McCann has moved to Carrefour in France. I reckon that this may provide a much needed boost for Carrefour’s ailing home territory.

McCann, as you know, used to be the Country Head for Tesco Malaysia.

Also, note this: According to Deloitte’s annual Retailer Survey, Tesco knocked from 3rd place to 4th by Germany’s Metro.

— Colin Harvey
Merchandise Director — Food Division.
PT Hero Supermarket Tbk
Jakarta, Indonesia

It is always a pleasure to hear from Colin, last time he wrote he was based in Malaysia and was commenting on the counterfeiting problem in China. We called the piece, Pundit’s Mailbag — Call For Counterfeiting Countermeasures.

We probably should write about Carrefour more. It is second only to Wal-Mart in size and its decisions reverberate across competitors and through the supply chain on issues such as food safety.

We have included Carrefour in a number of pieces, including:

Carrefour Judgment In India May Be A Good Sign For Wal-Mart

What Fuels Trend Toward Convenience Store Concepts?

Are The Police Afraid to Come Or Does Carrefour Fear Calling Them?

Carrefour has been exceedingly successful in countries around the world but, in recent years, has had trouble in its home market, France. As consumers have been rejecting its famous Hypermarkets, mostly located out of town, it has begun an effort to open smaller stores closer to customers.

Bringing in McCann as head of its French operations is an attempt to boost that performance:

While the retailer posted its first quarterly sales increase in a year in the fourth quarter, revenue declined in France, the company’s biggest market. McCann, who previously headed Tesco’s operations in Malaysia and Hungary, will be part of Carrefour’s newly formed top management team under the direction of Chief Executive Officer Lars Olofsson.

“Mr. McCann will bring us new energy, management skills and lots of experience with customer approach,” Chief Financial Officer Pierre Bouchut said on a conference call yesterday. “It will be a lot of added value for the Carrefour team.”

The five-member management team also includes Bouchut, international operations director Thierry Garnier, commercial and marketing director Jose Carlos Gonzales-Hurtado and a yet- unnamed director for Europe excluding France.

Of course, Carerefour’s gain is Tesco’s loss, and Tesco could use all the talent it can get right now. We have, of course, analyzed extensively its problem in America with Fresh & Easy.

Deloitte Touche Tohmatsu each year publishes a ranking of the world’s biggest retailers and Tesco, though growing, lost its third-place slot on the list. The Times of London called its piece, Tesco Loses Place in Global Top Three of Retailers:

Tesco has slipped from third to fourth place in the league table of the world’s biggest retailers, The Times has learnt.

According to a worldwide study by Deloitte Touche Tohmatsu, the accountants and business advisers, Britain’s biggest grocer has been overtaken by Metro, of Germany, best known in Britain as the owner of Makro, the cash-and-carry store.

In truth, these rankings are complex, as currency fluctuations play a big part and these changes in currency rankings were the main cause of Tesco losing its place.

Whatever the relative strengths of Carrefour, Metro and Tesco, the rankings reconfirm Wal-Mart’s incredible outsize position. Wal-Mart is bigger than Carrefour, Metro and Tesco combined, plus several more rankings down the list.

One suspects that anti-trust authorities are not oblivious to that standing.

Many thanks to Colin for his note from Asia.

You can download a copy of Deloitte’s report, titled “The Global Powers of Retailing” right here.

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