Monday, May 4, 2009

Carrefour drops out of multi-brand retail






French retail giant Carrefour has shelved its plans for multi-brand outlets in the absence of a local partner.

However, the company is on track with its plans for wholesale retail, where it is going solo.

Carrefour, the world’s second largest retailer, said it was not forging partnerships with any Indian firm, including Reliance Retail and Aditya Birla Retail.

“Carrefour is not associating with any Indian retail player. At the moment, Carrefour does not have anything to share on the same,” said a company spokesperson in an email to The Telegraph.

Plans for the first cash-and-carry store in the country by the third quarter of 2009 are on schedule.

However, front-end retail plans have hit a hurdle in the absence of a local partner.

Speculations were rife that the company was in talks with Future Group, Reliance Retail, Aditya Birla Retail and Spencer’s Retail for a joint venture on the lines of the Bharti-Wal-Mart deal.

However, after short listing six from 18 companies, it is yet to choose a partner.

Indian law allows 100 per cent foreign ownership in the cash-and-carry business. However, partnership deals with a local player is a precondition for entry into multi-brand retail.

Carrefour, which has 15,000 stores across 33 countries, had announced its plan to enter the country through the cash-and-carry route in 2007.

Analysts said stagnant sales in France — which accounted for nearly 50 per cent of the global sales — had prompted the company to explore India’s fast growing retail sector.

Carrefour said it was finalising sourcing arrangements with the suppliers of food and non-food items ahead of the launch of its wholesale outlet in Delhi.

“Every market we enter, we work closely with local producers, farmers, agricultural co-operatives and manufacturers. This concentration on domestic sourcing allows us to make valuable contribution to the development of the local economy,” Herve Clec’h, managing director of Carrefour India, had said.

The French retailer is competing with US-based Wal-Mart Stores, Britain’s Tesco and Germany’s Metro AG.

While, Wal-Mart will soon open its first cash-and-carry store in India in partnership with telecom giant Bharti Enterprises, Metro AG of Germany — the world’s fourth largest retailer — already has stores in Bangalore, Hyderabad, Mumbai and Calcutta.

Tesco, the third largest retailer, is also firming up plans to set up cash-and-carry stores in the country. It has also entered into a franchisee deal with Tata group’s retail arm Trent Ltd.

Assocham survey

Industry body Assocham wants a single authority to regulate the country’s retail sector instead of multiple authorities, according to PTI.

A survey by the chamber revealed that over 95 per cent of organised retailers are opposed to the retail sector being jointly regulated by the ministries of commerce and industry, and consumer affairs.

Submitting the survey, to the two ministries and the Planning Commission, Assocham said multiple governance agencies in the sector caused confusion, which needed to be removed.

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