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Carrefour Cash&Carry. (Photo Credit: Carrefour)
Carrefour to sell its stores in India
(FRANCE, 7/9/2014)
Giant retailer Carrefour announced it will close its five Cash&Carry stores in India at the end of September 2014, after having operated in the country since 2010.
Through a release, the company ensured that until now it will continue to be fully engaged with all its employees, suppliers, partners and customers to ensure a smooth transition.
According to retail consultants, the French retailer has been in talks with Indian retail companies and strategic investors about its Indian assets in recent months. It has invested about INR 3 billion (USD 50.17 million) in its India operations.
This exit is being seen as a part of CEO Georges Plassat’s three-year revival plan after the company's five stores in the country reported losses of USD 17 million in 2012, International Bussines Times reported.
Carrefour, which runs around 10,000 stores in 34 countries, has exited markets like Greece, Colombia, Singapore and Malaysia among others in the past few years.
The new Indian government under Prime Minister Narendra Modi has opposed foreign investment in the supermarket sector, fearing it will hurt small shopkeepers.
"The barriers were laid down by the previous government and the new government only made it worse by opposing the policy," stated Devangshu Dutta, chief executive of retail consultancy Third Eyesight.
He added: "So companies who do not want to lose money in the market have been left with very little choice but to either hold back or fold up."
Although India opened up its USD 500 billion retail sector to foreign direct investment, or FDI, in multi-brand retail in 2012, laws requiring mandatory local sourcing and the freedom given to each state to decide on the entry of global chains have discouraged many companies from investing in the country.
Meanwhile, the world's largest retailer Wal-Mart Stores Inc. is now focusing on opening wholesale stores in the country and recently launched an e-commerce venture in India.
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26 Quai Michelet
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Levallois-Perret
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France
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