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According to a new report from Retail Forward, French retailing giant Carrefour “will seek to improve its performance by consolidating brands and formats, integrating diverse organizations, and testing new markets, products, and services.”

In its new report, "Carrefour at a Crossroads", authored by Ira Kalish, Director of the Retail Forward Global Intelligence Program and the company's Chief Economist, it is projected that the world's second largest retailer will focus on lowering costs, improving non-food merchandising, and managing retail brands, all while expanding through acquisitions.

“Vast and complicated, Carrefour is no longer focused on one key line of business. Due to regulatory restrictions, it can no longer expand organically in its home market and its overall growth in recent years was due almost entirely to acquisitions. The company named for a major intersection is now at a crossroads of its own.

"Carrefour faces challenges stemming from ambitious competitors, quirky consumers, protective governments, and unfavorable demographics," Kalish said. "The ability to meet these challenges and leverage its strengths will determine Carrefour's future.”

Retail Forward expects Carrefour to make the following moves as it implements its growth strategy over the next few years:

• Offer the Lowest Price. Carrefour's food merchandising strengths are intersecting with a consumer increasingly focused on obtaining low prices. "Capturing this market will require greater attention to cost reduction through better supply chain management and vendor relationships," Kalish said.

• Become a Fashion Destination. Carrefour is taking steps to enhance its apparel offering. To do so, the company must become a successful apparel merchant and marketer and have a reliable, cost-effective, global supply chain for apparel.

• Leverage the Brand Name. Already a large seller of gasoline and financial services, Retail Forward expects Carrefour to expand these categories and explore new ways to capture cash from existing customers.

• Roll Out New Formats. In the years ahead, a large share of the company's growth will come from the expansion of smaller formats, especially its hard discount concept - both in Europe and elsewhere.

• Expand in Emerging Markets. In many of the emerging markets in which Carrefour operates, especially in Asia, and specifically China, there is vast potential to roll out new stores.

• Open New Markets. Although Carrefour is the world's second largest retailer, its absence from key markets such as the US, UK, and Germany, as well as its miniscule presence in Japan, imply a vast untapped potential.

Retail Forward expects Carrefour will evolve into a brand manager, with a portfolio of globally branded retail formats that carry a consistent message to target consumers.

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