French retailer Carrefour gains ground in Africa

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French retailer Carrefour has chosen the right time to enter the African market says Malcolm Horne, CEO of Broll Property Group. French retailer Carrefour has chosen the right time to enter the African market says Malcolm Horne, CEO of Broll Property Group.

In an attempt to secure an early advantage over competitors, French giant retailer Carrefour has partnered with CFAO to exploit the vast retailing opportunities offered by Africa’s fast growing spending power.

Hoping to maximise on demand for retail shopping, Carrefour has partnered with distributor CFAO to open shops in eight African countries by 2015.

Africa’s scope for investment is steadily increasing and demand for more formal retail options from shoppers is following suit. 

CFAO, which will own 55% of the venture with Carrefour, aims to generate about EU1 billion, or around R13 billion, in revenue yearly in 10 years from the link-up, and from revenue produced by the shopping malls it plans to construct. CFAO is controlled by Gucci-owner Kering SA. It distributes goods mainly in central and west Africa.

Malcolm Horne, CEO of Broll, says Carrefour has chosen the right time to enter the market.

“Importantly, it has also chosen a strategic partner with experience in distribution channels and a track record of entering emerging markets in Africa,” says Horne.  “Carrefour has identified the opportunity that Africa presents and clearly taken a view to position itself in markets with limited choices and huge shopper needs.”

The first African Carrefour is set to open in 2015 in Abidjan, Ivory Coast. From there, it is set to open in Nigeria, Ghana, Cameroon, Congo, Democratic Republic of the Congo, Gabon and Senegal.

Carrefour’s arrival points to exciting times for the retail market in Africa.

“Carrefour is taking early advantage of what will be an increasing move in Africa of people looking to do a weekly grocery shop of items kept fresh through modern advancements like refrigeration,” said Michael Dennis, an analyst at financial services firm Cantor Fitzgerald. “Setting up good distribution channels in Africa can be extremely difficult and CFAO’s local connections with companies and relationships with government are an advantage,” he said.

The trend of retailers entering new markets will continue to accelerate as Africa develops and demystifies. Increasing economic participation in African countries has the potential to springboard further growth and positive demand to invest in infrastructure, says Horne.

Horne believes the continent is well poised for further development. “Early entrants into this trading space have proved that they can dominate markets and that smaller retailers follow them into these markets,” concludes Horne.



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