A presentation on the case study of Carrefours MIsadventure in Russia in 2009

1. MISADVENTURE
IN RUSSIA
BY: HASAN FEHMI GENCER & HAJRA KHAN

2. OUTLINE
1. CASE BACKGROUND
2. CARREFOUR BACKGROUND
3. CARREFOUR HISTORY & EXPANSION
4. INFORMATION ON RUSSIA
5. OPENING STORES IN RUSSIA
6. WHY CARREFOUR FAILED IN RUSSIA?
7. SUMMARY
8. QUESTIONS?

3. CASE BACKGROUND
 We will be discussing about the unsuccessful attempt by Carrefour
to enter the Russian market.
 Carrefour suddenly announced its withdrawal from investment in
Russia and selling the business.

4. CARREFOUR BACKGROUND
• Carrefour was founded in 1960.
• Number 1 retailer in Europe and 2nd in the world.
• As of December 2008, Carrefour group operated 15,430 stores in more
than 30 countries.
• Carrefour’s revenue was 108 billion euros sales incl. VAT for the year 2008
• 374,478 employees worldwide
• Carrefour has branches located in Europe, Latin America, Middle East, and
Asia.

5. CARREFOUR 1960
.
CARREFOUR 1963
 Carrefour opens its first supermarket in Annecy,
Haute-Savoie.
 Carrefour invents a new store concept: the
hypermarket.
 The first Carrefour hypermarket opens in Sainte-
Geneviève-des-bois, with a floor area of 2,500 sq.m, 12
checkouts and 400 parking spaces.

6. CARREFOUR 1970
.
CARREFOUR 1985
 Carrefour shares are listed on the Paris stock
exchange.
 Carrefour brand-name products are introduced.

7. CARREFOUR 1993
.
CARREFOUR 2006
 Carrefour opens its first hypermarkets in Italy and
Turkey.
 Carrefour disposes of its assets in Korea, the
Czech republic and Slovakia.

8. CARREFOUR EXPANSION
Carrefour International Expansion
1998 – Chile*, Colombia, Indonesia
1999 – Czech Republic*, Slovakia
2000 – Japan*, Dominican Republic
2001 – Romania, Switzerland**
2002 – Egypt
2004 – Saudi ARabia
2005 – Algeria
2006 – Cyprus
2007 – Jordan, Kuwait
2008 – Bahrain
2009 - Iran, Syria, Morocco, Bulgaria,
Russia
1969 – Belgium
1973 – Spain
1975 - Brazil
1982 - Argentina
1989 - Taiwan
1991 – Greece, Cyprus
1992 – Portugal
1993 – Italy, Turkey
1994 – Mexico*, Malaysia
1995 – China
1996 – South Korea*, Thailand, Hong Kong*
1997 – Singapore, Poland

9. INFORMATION ON RUSSIA
 14 Russian cities had a population of over 1 Million; Largest country in the
world.
 2008 retailing industry in Russia was valued at $480 Billion (27.5% growth
over the previous year).
 Food retailing accounted for 45.3% of the total retail sales
 2002 – people in Russia spent 94% of their monthly earnings and unlike
US, they were free of mortgages and lived with family.
 2009 Russia was the fastest growing consumer economy in Europe.

10. CARREFOURS INVESTMENT IN RUSSIA
First Store in Moscow
 Opened on 18th of June 2009
 Carrefour invested 8.8 million euros
 Sold 15,000 food items and 30,000
non-food items
 8,000 square meters
 59 checkout counters
 450 staff
Second Store in Krasnodar
 Opened on 10th of September 2009
 Carrefour invested 8 million euros
 8,500 square meters
 350 staff

11. WHY CARREFOUR FAILED IN RUSSIA?
 Carrefour exited Russian market on October 15 2009 just four months after
their opening; reasons for their exit being the following:
I. TARGET WAS TOO BIG
II. LACK OF ACQUISITON OF SEVENTH CONTINENT
III. COMPETITORS WERE TOUGH
IV. POOR BRAND RECOGNITION AND PRICES
V. SHAREHOLDER PRESSURE
VI. INSUFFICIENT MANAGEMENT TALENTS
VII.BUREAUCRATIC HASSLES
VIII.POOR ECONOMIC CONDITIONS

12. COMPETITOR
S IN RUSSIA

13. SUMMARY
 We believe Carrefour may have not given their investment enough time and they backed out too
soon.
 Carrefour’s strategy for the Russian market was flawed, according to a senior analyst.
 And their target was too big; although they had started their research earlier in mid-1990s by
opening a representative office in Moscow, and exited the country during the 1998 financial
crisis. In June 2006, Carrefour again started contemplating on whether to enter the Russian
retail market and sent a delegation to tour across Russia for locations, to meet local officials and
interact with other retailers.
 Overall Carrefour did enter the market too late, their international and national competitors were
already way ahead.

15. QUESTIONS