Carrefour's Expansion into Spain: Adapting Hypermarket Operations and Regional Buying, Exams of Reasoning

Download Carrefour's Expansion into Spain: Adapting Hypermarket Operations and Regional Buying and more Exams Reasoning in PDF only on Docsity! The Carrefour Group the First 25 Years by Steve Burt University of Stirling, UK Abstract The Carrefour group has been responsible for introducing several innovative concepts to the French retoil sector - most notably the hypermarket and "no-name" products. This article charts the development and strategy of CarreJour over the first 25 years of the company's existence. Introduction The death of Marcel Fournier, in January 1985, saw the passing of one of the leading figures in French retailing. In collaboration with the Def- forey family, Fournier guided the Carrefour group to its present posi- tion as the most successful hypermarket chain in France. Since its crea- tion by Fournier and Louis Defforey in 1959, the group has grown to achieve a 1985 post-tax turnover of 44,169 million francs and a net pro- fit of 520 million francs (see Figure l). In addition, during the past 25 years, the Carrefour tradename has appeared in no fewer than ten coun- tries spread over three continents. The group acquired its tradename from the site of the first store open- ed by Fournier and Defforey in 1960. This 650 sq m supermarket was Iocated at the crossroads (carrefour) of the rue du Parmelan and rue Andr6:Iheuriet in Annecy. However, it was in 1963 that Carrefour first made its mark on French retailing. The previous year Fournier attend- ed the Club MMM seminar held at Dayton, Ohio, and became convinced that the retail techniques championed by Bernard Tiujillo would pro- vide the way forward for Carrefour. Early in 1963, Carrefour opened the first hypermarket in France in the small town of Sainte-Genevidve- des-Bois outside Paris. This venture proved to be an instant success, 54 | International Journal of Retailing 1,3 99 | dnotC rnofa DJ aqJ eq plno/!\ l€ql uonelndoJ e dolo^ap 01 pu? '10{r?ur lr"ler pesrlBuorEer .(1Euor1s e dgerluesse se.{\ leql\ ur,(1r1uepr Ieuop€u B rlsrlq€lse otr rapro uI eruuJd u1 luerudolem11 oJols '0t6I ul (e1yesre61) sellortr1 te eere sales Jo ur bs 969,9g ro^o qtr^\ pu€ '996I ur (uo,$ xnarssru,o1 e u bs gg6'gy relo Jo uer€ selss s qll^{ serols trsJrJ oql Eupedo dq 'ecuerg ur rel.r"ler le4reured,(q Eupeel eq1 se uorlulnder strr urclureru 01 s€1rr JnoJerreJ teiet '(tg6l '1urcssno;) reed lsrrJ eql Jo pue eq1 ,{q scuer; uolllr{u I'gt pue 'uolleredo Jo srlluotu xls tsrrJ aqtr ur scue4 uolfinu 9'gI Jo rolournl e Surlerqce alols eq1 qll^\ teo 98 18 e8 Z8 18 08 6L AL LL 9L SL tL tL ZL rL 0 09 o0l o9L leeA z8 t8 08 6L AL LL 9L 002 -n 6 092 B oqt t oor - 09b oo9 o99 o09 sL d 9Zo 9e 9L iL TL 0 I OL oJuururoJJad l€Jcuuuld :dnolg JnoJOJJBJ eql .I a.rn8lg One of the major impacts of the Loi Royer was to raise the costs of development through delay, increased application and appeal costs, and the creation of a market for authorised sites (Rochard and Peretig l98l). In 1980 Carrefour claimed that the Loi Royer had increased the costs of building a store in France fuom2,577 francs per square metre in 1972, to 3,500 francs per square metre in 1979 (LSA 757, 1980).In addition, Carrefour also felt that the company was penalised for its ascendancy in the hypermarket sector through low success rates in applications made to the planning commissions. In an attempt to outmanoeuvre these restrictions, since 1974 Carrefour appears to have placed greater em- phasis upon expansion through joint subsidiary companies and acquisition. Analysis of company reports and store listings provided in the French trade journals Libre Service Actualitds and Points de Vente show that between 1963 and lgT4,theparent Carrefour company opened 19 hyper- markets. Of these stores, only one appears to have been the result of a takeover, the former Galeries Parisiennes tore at Antibes which Car- refour acquired in 1973. Over the same period, twelve stores were open- ed by joint subsidiary companies, and only one of these, the former Centor store at kscar, was taken over. In contrast, the 197 5 to 1985 period presents a different picture. During this period the parent company opened a further 16 stores, closed a store at Cr6teil in 1979, reduced the store at Villeurbanne to supermarket status in 1977, and transferred the Chdlons-sur-Marne hypermarket to a sub- sidiary company SCI Croix Dampierre in 1981. However, in reality on- . ly eight of these stores were new openings; the others were existing stores that were either absorbed or acquired from joint subsidiary companies. Irt 1975, the three Soracma hypermarkets were absorbed into the parent company, as was the Venette Superstore hypermarket in CompiBgne dur- ing 1977. These moves were followed at the beginning of 1980 by the absorption of the hypermarkets at Givors (from Givors Investissements) and Rambouillet (Bel-Air), and in 1982by the absorption of the store transferred to SCI Croix Dampierre a year earlier. Finally, in 1983, the hypermarket at Gennevilliers, which was operated through SEMGS in conjunction with Roger Flament, was absorbed by the parent company. The increased importance of joint subsidiary companies in maintain- ing Carrefour's growth is illustrated by their activities orrer the same 1975 to 1985 period (see Figure 2), during which these companies opened 25 stores, five of which were later absorbed by the parent Carrefour com- pany. GSD opened another two stores, one of which was the former G6ant Perso hypermarket at Chdteauneuf-les-Martigues acquired from Soprodis in 1977; Sogara opened three stores including gaining full con- trol of the Sochadis "Rendez Vous" hvoermarket at Sovaux in 1977 and 58 | International Journal of Retailing 1,3 6tS I dnotg rnotarrD1 aLlJ srql t€ql ,(1a1{ uraas plno^\ 1I 'drerprsqns lulol csD eq] Jo lorluoc 1ng permbce 986I qtJ"I I ur pue 'oJnluo^ lulof otu€rEos eqtr ur JoutrJBd Jroql 'seureporu sJlolduroC ul eJer{s lual Jed 61 e Eurrrnbce ,{q 7961 ug sorols qcuard rroqtr Jo dgqsreumo qtr pepp[osuoc requnJ JnoJeJJeJ 'soJnl -ue^ osaql Jo aruos ,{q pelaado seJotrs Jo uolldrosqB luenbesqns oqtr puB 'seru€duroc drerprsqns lurol yo uorleJodo eq1 qEnorql ,(lueruud ocu€Jd ur papuedxe seq JnoJoJJBJ '?16I ecurs 'letll rtroqs sluarudolerrep eseqg 'peluasardar ueeq ,{lsnovrerd lou peq,{eq1 eJoq^\ "oJe ue 'eJueJd Jo qiloN 0q1 01 sseJce qtrl^\ rnoJorr€J peprirord luaurdolelep JotrtrBl srr{J 's1o>Fuured,(q ..lulod puou,, uo^as Jo uorl€iodo 3rI1 re o elel 01 luolue^ol J a,rtleredo-o3 Eulpe eq1 qlul 'doocre3 ',{rerprsqns lurof e peuroJ rnoJaJJeJ 586I ul tleurg 't86I ul eule5-,{arrasll^I 1" srpBcuBrd puE '186I ul ouogs-rns-ser{cQJJ 1€ TIAJO '096I ul notrrod-nplmouosser{J l€ dCC sarJ€rprsqns nau qSnorql pe -uedo a-ram sarols roqlo 'xnorlg pue 'lmerno51-i(rrn 'aureyq-rns-sdueq3 1" serols oorql Iorluoo o1 lsaredng dreplsqns aeu B Jo uorl€erc oql qtrl^\ rorllrnJ uo{81 s€,r oruerSog ur seurapol4l srroldruo3 qll^{ uortr€roqel loJ eql 'uo1-rns-eqJoU e1 1u tosrpog ituerprsqns eq8norql ouo - sorols o1r\1 roqunJ e peuedo oruerSoS pue isulnoEuv 1" eJols uBJocos eql real 9L t,L asrqcueJJ sarJe!prsqns lulof uedluoc tualed SB-C96I oruuJtr ug slerlrururad,(H JnoJauBJ Jo dlqsJau,ro eq1 '3 amEgg Map 2. Carrefour Hypermarkets in France 1985 Stores operated by: o Joint subsidiary companies O Carrefour (parent company) approach to further development will continue as not only does this strategy spread the initial costs of development; but also applicat- ions for development made in conjunction with local or regional retailers were thought likely to be viewed more favourably by the planning commissions. By 1985 Carrefour operated 60 hypermarkets and four supermarkets in France (Map 2), and 48.3 per cent of the hypermarkets were controlled through joint subsidiary companies. The formation of Carcoop marked the beginning of renewed expansion for the within France. During the early 1980s the number of new store ings had fallen to around one per year, but this collaboration seven stores to the Carrefour portfolio, and a further five new are scheduled for completion during 1986. group open- added stores 60 | International Journal of Retailing 1,3 tg I dnotg tnolaltDJ aqJ S86I ulsds ul Ea{rulurad,{11 rno;euu3 '€ dEI tr '(g delnf) sorr€Iplsqns snoIJeA s1r qEnorqtr saJols 0Z Eullorluoc 'urcdg ut roleredo pryeurad,{q Eupuol eq1 s€ paqsllqtlse se \ rnoJerreJ sg6l Jo pue aql ,(q 'salll^pc€ eseql Jo trlnseJ B sv 'BJI^od puB lPpuoc oc -u€g lqi pue ereSog tq, S tet q peluroJ ,{uedruoc e 'setagredng sopuerg ur 1-re1ug qsruudg sql perrnbce sopecreuuedlH op olouor4 'uotltppe uI '816I uI sopecJoluredrg ap eclJaql uI ?qcJetuorng lq pleq eJBI{s 1u0c na-p aqi go asuqcrnd eql ,(q pacro;urer ptre'SL6l ut sopecreurradrll ep erolouord Jo uoIlPuJoJ eqtr ut peleeder sen dretptsqns r€Iulv eql uI oEeu4S qry'r lueruaEuerre dqsreulred eq1 'setueduroc ,tu€IpIS -qns Jo Jeqrunu e q8norql eceld uopl set{ oJnluo^pu qsuedg s.JnoJoJrPJ 'eurlueEry uI erols trsrIJ sll peuodo dnorE eql Zg6l u\ puu 'lrzeJfl ,(1;elnctged 'BcueLuV ulleT pu€ urcdg ut peluJluet -uoc ueoq seLl vL6l eculs JnoJorre3 ,(q peorqe aputu truotulso uI 0q1 Jo ,(lrrotetu N€^ eql '(g orn8rg) seJols tg Jo luoo red 76 o1 ueslJ pBtI uop -rodord sql '586I ,{g 'pildec aql Jo truec rad gg 1see1 le plsq rnoJorre3 qsrqA\ uI seF€lplsqns ,{q pellorluoc oro^{ qcIrIA'\. Jo pJlt{l e ,{p9 bcu€Jd eprslno sorols a le^\l palerado dnorE rnogeueJ 3I{1 9L6l uI ,tuep1s-qns eqi yo lueuroEeueur orll sloJluoc ,,(11uu1rodru1 lsotu 'Jo lseJalul fltroferu p sploq rnoJaJJ€C qcltll,\ uI soJnluel esoql ul pue '1se1earE se pallacred uoeq seq qu\orE leryuurrad,{q oJntrnJ roJ ppuelod eql areq^\ selrlunoc esoql ul polse^urar ueeq seq slueulso^ulslp eseql ,(q pesmr pltdec oql Carrefour has devoted considerable ffort to adapting and integrating its hypermarket operation in Spain, including the regionalisation of buy- ing to cater more efficiently for distinct regional tastes, and the adop- tion of a Spanish tradename (LSA 839,1982). Owing to the piecemeal historical development of the chain, the group's hypermarkets original- ly traded under a variety of names including "Carrefour", "Pryca" and "Hiper", but it was decided to adopt the Spanish name "Pryca" (Precio Calidad: Price and Quality) throughout the whole group to encourage integration. In Brazil, Carrefour has experienced similar success, with the Ti"evo Com- mercio e Industria subsidiary (now renamed Carrefour Commercio e Industria) opening approximately one store per year. However, high rates of inflation have hindered the financial performance of this subsidiary. and for certain stores problems of packaging and supply of goods have arisen. The third Carrefour hypermarket, opened in Brasilia in 1977, received 80 per cent of its stock from Sio Paulo, some 1,300 kilometres away (Grobscheiser, 1977)! However, in spite of these difficulties, Car- refour has made considerable investment in the Brazilian market in which it operated ten stores at the end of 1985. The group's commitment to expansion in South America was reaffirmed following the opening of two stores in Argentina in 1982 and 1984 (Map 4). A further dimension was added to the international strategy of Car- refour when the company acquired a 20 per cent stake in the Costco Wholesale Corporation of Seattle during 1985. Costco, formed in 1983, operates twelve discount warehouses in the West of the USA. Although this deal involved an agreement whereby Carrefour would not extend their shareholding interest for five years (LSA 968, 1985), the group are using the opportunity provided by this investment o examine the American market carefully with a view to opening stores in the USA at some later date. Essentially, since the introduction of the Loi Royer, Carrefour has con- solidated and increased its investment abroad, concentrating upon coun- tries where the retail structure remains largely underdeveloped. In these countries the conditions favouring the modernisation of the retail sec- tor resemble those existing in France during the early 1960s, when self service and the hypermarket concept were rapidly adopted. Furthermorg Carrefour have not been prepared to undertake the role of a "sleeping partner" and have concentrated on those countries in which manage- ment control has been achieved. The importance of overseas investment to Carrefour can be illustrated by reference to the store profile of the group. In 1970 Carrefour op€rated only two stores outside France which accounted for 11.8 per cent of the group's floorspace. By 1975 the 64 | International Journal of Retailing 1,3 Sg I dnor9 rno{auoJ aqJ rnoJeJJ?J ol luacelpe salols IIC dola,rap o1 'uolsuedxg EIu"Jols€J .ruuouroc ,(rerprsqns 1u10t e pouroJ pue 'euerolse3 'dnorE a1d1l lntu IIC Eurpeel eqtr ul ereqs luec rad 1tr € p-eurulqo rnoJarreJ 'tr6l UrdV uf i.ropas 11€pr reqlo u1 seppngoddo lq8nos rnoJerr€J 's0r6l e1el lq1 aurrnp aJu"Jd ur sdnorS lz1er eErq reqlo ,(ueur qllA\ uotuluoJ uI uoIlBJ.IJIsJo I( JoJ qcJues eql .Sg6I ul luec red Z'02 ot pue '086I ul luac rad 7.g1 ol ,gL6l ul luet red g'1 luo{ ueslr sBI{ selols es_aql ,{Q JoJ polunocc€ Jelournl dnorE lelol Jo eJuqs eql i{lJ€lluqs 'acedsroog go l.rm nd ;76 roJ pelunocoe soJols ?€ '986I uI pue 'ecedsroog i,dnorE eql Jo lusc rcd g.g7 peluesarder aJu?Id eplslno serotrs e^leA\l 986I uJlJeurY qlnos q s1a4ruur.rad,(11 JnoJaJJuJ 't ds6 which must meet sales objectives established annually by the company. Even the Samod buying subsidiary, created in 1967 for the purchase of "bazar" and textile goods, is not a buying centrale in the traditional sensg but acts more as a selection agency for these types of goods, recom- mending which lines should and should not be adopted. The store direc- tor is then free to decide which goods his or her store should carry on the basis of this advice, and is fully responsible for these decisions. The decentralisation of authority within the carrefour organisation is intended to provide scope for flexibility, allowing store managers to res- pond to local factors and environmental conditions. The group does not pursue a national price policy, allowing individual stores to react to local competition and to take advantage of any additional discounts that they can obtain from suppliers. Denis Defforey regards the group as a "confederation" of individual stores operating within certain com- mon denominators (2S.4 930, 1984b). Through this approach Carrefour aim to benefit from "the delegation of responsibility and federation of effort". A further indication of the decentralised nature of carrefour is the size of the head office staff, which in 1973 numbered only twelve - headed by the company President, Marcel Fournier, and the two joint Directors- General, Jacques and Denis Defforey. The remaining nine personnel con- sisted of a finance director, two counsellors (one responiible for inter- nal management, who established and monitored sales objectives, and the other responsible for social and administrative affairs), four super- visors, who each co-ordinated personnel, supply, and short-term manige- ment problems for five to six stores, and two secretaries. All other operating functions were contracted out to external agencies (Toussaint, 1984). In 1978, Carrefour appeared to accept he limitations placed upon fur- ther expansion in France through the opening of new stores, and decid- ed that future improvements in the group's performance should be ryliey9! UVltre development of store operation and management (ZS^4 668, 1978). To realise these improvements, Carrefour reorganised their senior management structure, creating a Group Directorati and an Ex- ecutive Directorate. The Group Directoratg consisting of Marcel Fournier and Denis Def- forey, assisted by a finance director, a general affairs director and a marketing director, was to involve itself with short and medium-term issues (2S,4 666, 1978). Whereas the l4-member Executive Directorate headed by Jacques Defforey and Bernard Fournier, and composed of seven regional directors, three merchandise directors, an administra_ tion,/management director, and a social affairs,/personnel director, 68 | International Journal of Retaiting 1,3 69 | dnor) rnolarroJ aqJ ,(lEurprocce seJols sll uI palJr?c lueulrosse lcnpord oql palsnfp€ ser{ pu€ 'pooJ qse{ uodn peceld slseqdura Eutseercut eql dpelncpred 'spueruop Jolunsuot EulSueqc o1 puodser o1 rlcmb ueaq s"q JnoJeJr€J lenod Sudnq IIBJa^o s,dno;E eq1 errordrul ol sldruelle ol uolllpp€ uI '(eVget '0t6 VS'D drqsreuged TBIIIUIS epocunouue 'JJDS aqtr 'eprluac s<lualue otrAtr alrluredo-o3 oql pu€ urgtq pue '(7961 '9Z6 VS7) lceluoJ Jo uolleluJoJ aq1 ut raryrod 3uilnq rleql poulquoc salerluoc roprJ€d pue dpucog eql t86I qcr€IN ul pu€ 'o^IleIlIuI slql otr pepuodser sro111edruo3 '(V8el'OZ6 757) scuer; uolruur 000'00I go uotEar er{l ur Jalournl lleler peulquoc € qll^\ IoJV papl^oJd pue 'saurepol41 srrolduro3 pu€ 'oJl?tr 1 'sgporuor4 'ouIS€C 'ereEog 'u"qcnv Jo leql qllrrt JnoJerr€c 3o rarrrod Eur,{nq oql psulqluoJ EutdnorE ̂\eu sIqI '(s86I '896 VS7) ng6l ur ,{1ree .p1er1uec-eEelu,, uollslcossv-llrv eql Jo uollsluJoJ oql qlp\ pepuodser pue 'sroltledruoc Jloql ueql spooE roJ oJoru EUL(ed se lasueqtr punoJ JnoJerre3 'fero;Yeq srue6l 01 Eutproccy '€JdIq pue 'drpecog 'coprre4 s€ qJns selerluec Eudnq q8norql rervrod Sutseqcrnd Jraql peulqruoJ ecueJd ur srolerodo pryeruredfq;o ,{lrrofetu eql 'sdnorE 1rc1er eErey eql;o re.tod Eur,(nq aq1 uodn pesncoJ se^\ uoltruoll€ 'ecuerg ur Eurlrule.r pooJ ul q1^\oJ8 ounlo^ 1(ol q1l^\ 's9361 ,(Fze "Ut u::l: '(086I ' Lg L VS7) suorlerado seosJe^o ro3 .(lryqtsuodsar qltlr JsIuJnoC pJBuJog pue 'porueg puu oouBrd uI soJols ro3 dlqlqtsuodsor ql1lt,&ro;;eq sanb -cB[ Jo pesodruoc puu ,{aro;;eq srueq dq peJl€qc eallluluo3 ct8e1er1g Jeqrueu-eoJrll e pu€ 'e1or leuolleredo uu IuoU i!\oJpqltn oq,tr tatu -Jnod IooJBIN ,(q rerro paptserd ..ocu€llle^Jns Jo II3unoJ,, B JO UOII?OJC oqtr A\Bs uollesrue8roeJ IEuJelul JeqilnJ ',6L61 uI 'SaIlI^I1c€ ctJtceds uodn uorleJluecuoc JoJ ̂{olle o1 pue dnorS aql Jo slo^el luoreJJlp lnoqEnorql ,(lrlrqrsuodser peards 01 se^\ uotlestueEroer l€urolul slql Jo uollualul eq; (aroJJeq senbcel ,lqy.zetg ul lBI{1 puu ';erurnog preuJog ,{q uoes -relo eq o1 su.u uredg ul luetulse ur dnorg 'ol€Jolcsrl6l o^Ilnoexg 0q1 Jo socrdsne oql Japun IIoJ qJIq^\ K1e11 go uotldocxe oql qll^\ - solerolserlql oql Jo roqlle urorJ ,(lluepuedeput spelu oJe1l\ suotleredo eseql Euprlo,r -ur suorsrcep 'sarnlcntls luetueEeueur u,!\o JIaI{1 t{lll\ selrelplsqns luep -uadopur se dolelep 01 slsoretrul seasralo Jleql pepuetrul JnoJorr€C sV 'setr€JolceJlcl dnorg pue o^rlncexg oql qloq fq ,(putot apeur eq ol erea suolslcep 'sarols meu;o Euruado eql s€ qcns 'sansst urc1rec Jog '13^el oJols eqtr 18 p3^lo^ul lsoru souo oqtr ero,tr,(oqtr se '1uaudo1a,op leuotlerado o1 ecuetrrodrul IelI^ Jo se pep;eEer se^\ oslllruruoc slql uo sJolceJlp leuotEer eql Jo eloJ 3I{1 pue 'lq8pgo; ,{rela ecuo leetu 01 papedxe s3 \ olerolcerlq 0^I1nc0xg oql '(9461 'a1ge1eg) 4romleu alols eql o1 setSelerls osoqtr Jo uoIsnJJIp eqtr etreSrtsur pue dnorE eq1 ;o ,{Ee1er1s rutel-Euo1 eql ol"FtuJoJ 01 se.t\ Figure 4. Carrefour: Sales by Product Range 1972-82 76 77 As Denis Defforey remarked in the company's 1984 report, ,,In 25 years consumers have changed. All of us in Carrefour are conscious of this, we adapt ourselves, we innovate, we progress3' One result of the careful monitoring of consumer behaviour and the operational responsg has been a steady rise in the proportion of the group's sales accounted for by fresh produce since 1970, as Figure 4 shows. Similarly, distribution costs are constantly under review at the family of goods, and even in- dividual goods, levels. Reflecting the success of some of these adapta- tions in operating policy, space productivity throughout the group has risen consistently from 19.4 francs,/sq m in 1974 to 55.5 francs,/sq m in 1985 (Figure 5). The careful attention paid by Carrefour to changing market conditions is further reflected in the hypermarket opened at Etampes in August 1983 (The Grocer, 1983). This store was deliberately adapted to suit the economic recession of the early 1980s. The store design was kept sim- plg with no false ceilings or automatic energy control installation, and few decorative lements. Operating costs were kept down by simple and functional fixtures and a basic presentation of merchandise with 70 | International Journal of Retailing 1,3 -9 t .9 A-A-A Grocery fffff| Fresh produce Hard goods eL I dnorg nota oJ aqJ uo uortr"ruJoJur 'suorloruoJd ernlny pue luaJJnc Jo slle1ap 'secud lueunc apr,rord pue "{Iep pelepdn are ura1s,{s lql uo Bl"p eql 'el}eue1 1" eJols Jreql aspJo^pe o1 uals,{s uop"ruJoJul oql uo saEed gg5 eql Jo 0g ue)l?l o eq JnoJeJJe3 pue 'uo6ar aql lnoqEno;ql pel€lsut uaeq ercq spulrurel Iellulhtr prresnoql rnog 'uolEar auSqrduro3 eql q lueruFedxa 1e11ur4 e ro; e porrrocol roleu eql se pap" seq dnorE oq1 'pegodar seq (t86I 'Ll6pue Vg6I'ZV6) USZ sV 'soppllc" puotlouord pue Eulsltrarrp" q1F\ peurec -uoc serEolouqJel 1(eu o1 e,rpdecer eJolu ueaq e Bq tnoJorr€] te^e \oH 'slro^ueu sJJg u^\o Jr3ql aleEglse,rur 01 sl€rJl Ieuorluu ruo{ ulreJpqll^\ e^Bq alerluet toplJed eqtr pu€ oursBJ 'ueqcny qlpr Euole dnorE aq; '(yg61 'ncotC aqJ) rl3ltq- oo1 ,{11uerrnc eJ€ suollc?su?rl JoJ seEreqc {u"q i3q1 aJuerd uI sJellelar ,(recorE e8rel Euoure gsqaq preueS eq1 Euueqs 'sruols,(s SIdg Jo uoll -Jnporlur eqtr EuruJeruor suol1u reseJ pesserdxa ̂Bq JnoJsupC 'dlJeUuIIS 'Oget'tZOt yg7) ,tuesseceu lou sr,ffio1ouqce1 uolletuJoJur qcns lueserd le leql e^e1eq lueueEeuuur 1nq 'e;o1s srollll^auusD eql 1€ popnpuoc ueaq Ja^e^{oq e €q slso.1 'popno;d ll l€ql sllJeueq aql JoJ ezrlsuadxe oo1 sen ̂{3o1ouqcel eql lqEnoql deql aunl eql trB sB 'acuerg ul ,{Eolouqcel SOdg Jo sreeuord eqt Euoue eq o1 ̂{1a4lun sen dnor8 oql r"qt g16l ur pepilupe JnoJeJJBC i(Eoyouqcal ̂\eu Jo uopdope aql o1 preEar q1116 '(sse r 'xleqaa) {cnqao1 sJ€eS Jo ,{replsqns e ',{ueduroc oJu€Jnsul selelsfiV eql q1p\ suorlerloEeu Eulreq uaeq e Bq JnoJeJruJ leql lsaSEns JnoulnJ pue 'pe,,{e1ap aq ilI,!\ ecr^res slql Jo uolsuedxe JeqUnJ leql pecunou -u? seq ,(lr,r,rtrce slql IoJluoJ 01 peruroJ sB^\ qJlqi!\ (JnoJerJBJ sgrnssv sep lueurednoJD) JVD trerprsqns peuA\o luec red 94 eqtr lueserd ly 'Eulluroddeqp ueeq seq eJu?ruroJred 11ure,lo s1r 'uotlelouul slql Jo sseJ -cns lerlrul aqt atldsep terc.no11 'seJols esoql uI elqBIIB € ep€ru eq plno^\ se1c11od ecu?rnsur euoq l€ql pacunouue s€^\ lr S861 1sn8ny ur pu€ - ,(11ncg 1B tueqtr Jo 00L'I - serols lrl3lo qEnoJql sarclod ecu€Jnsur Jec 00L'€ plos p€q rnoJarre3 tue,{ tsrrJ oqt Jo pue eql ̂g '9961 Eurrnp eere sadly-augqA aql ul sp{r€urred,{q Jeqtro 01 pepuexa Euraq ecyrras aq1 01 pel 'sqluou a^lJ lsrJ eql w plos slc"rluoJ 000'I qll^\ 'lueurrradxe srqtr Jo ssoccns erll 'ocueJnsur Jet IIes o1 ueEeq pryeurrad,(q ,(ilncg sql ueq^\ ?86I uI pepuelxe JoqilnJ sBlr\ seJIAJes IBIoU€uIJ Jo uolpnpoJlul sql 'slno{ceqc eJols le sleurruJel luau,(€d ecnporlur o1 pue 'uor1 -eredo snoruouolne uB s€ dds dololep 01 sr uollualur aql arnlnJ eql uI ads ul er€qs lual red 97 e {oo1 puu uorlerado pJ€c lrpeJc eqtr q pa^lo^ -ur orueJoq 'ualolaC lauged A\eu € 986I Euunq '(gget tln) S86I ul scuerJ uolilrtu 6'5I Jo xe1 JeUe lgord 1eu e peaoqs qcqm (sse4 sluauered sep 919rcog) 449 ,{reprsqns e qEnorql peleredo sI pr€c ..ss€d,, eql 'sprec ..ssed,, ploq sreuolsnt 000(L7Z 'S86I dq pu" sJeuolsnJ 000'€tI the activities of the commercial centre, and details of the services of- fered by the Carrefour store. The cost of this system for the consumer is that of a phone call, as a special number provides access. Following the success of this pilot scheme, Carrefour are planning to equip their remaining stores with this facility as soon as the expansion of Minitel allows. The image of Carrefour as the leading innovator in French retailing is one of which Carrefour are understandably proud, and the group has taken steps to preserve this reputation. In 1984 the group's advertising expenditure amounted to 90 million francs, compared to 63 million in 1983. As TV advertising by retailers is prohibited in France, Carrefour has taken advantage of other methods, one element of which is the mon- thly Carrefour Journol produced for each of its stores. This eight-page news-sheet, which accounts for around 20 per cent ofthe group's adver- tising expenditure, isdelivered free to approximately 560,000 households (LSA 940, t984). Carrefour have made efforts to reduce the role of promotions in their advertising strategy, believing that too many of these activities can pro- ve detrimental (LSA 685, 1978). Instead emphasis has been placed upon more sophisticated promotional strategies and in particular upon the construction of a Carrefour image which stresses the qualitative aspects of the organisation (Clauteaux, l98l). However, price competition still remains a central element of the group's operating philosophy. In the annual survey of retail prices conducted by the Consumers' Associa- tion and published in Que Choisir? Carrefour was recognised as offer- ing the cheapest prices in France in the 1984 and 1985 reviews. Discounting has been central to the group's operating strategy in Latin America, and in France it is in relation to this aspect hat Carrefour's advertising strategy has been at its most innovative. In 1979, Carrefour first tangled with the thorny issue of the legality of comparative adver- tising, when the group launched an 'tconomic indicator" to reinforce the discount element of the Carrefour operation (LSA 701, 1979). This index was derived from the price of a shopping basket of 200 brand name products, chosen each month by the Ifop-Elmar agency (without prior consultation with Carrefour) from goods featured on the Insee consumer price index. The cost of this shopping basket in the Carrefour store was then compared with the cost of the same goods in the stores of the group's four main competitors in the region in question, and the results were published locally. The issue of comparative advertising was again to involve Carrefour in late 1983. 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