The crisis process of Carrefour, the leading company in the country, exposes the difficulties that supermarkets face. In a context of stagnating consumption aggravated by the advancement of wholesalers, new shopping habits and the fight with Chinese supermarkets, the big chains concentrate the faults in the evasion and unfair competition that implies. Analysts and executives of the sector agree, but suggest that there are other factors to take into account, such as the profitability of each point of sale and the offer of own brands. “We have economic problems and the large multinationals must adapt their business models,” sums up Diego Gizzi, retail manager at Nielsen.
In that sense Carrefour goes, both locally and globally. From its headquarters in Paris, the new world CEO, Alexandre Bompard, announced an ambitious plan to restructure the chain in the next 5 years. In Argentina, the company initiated a Preventive Crisis Procedure (PPC), a procedure that requires negotiation with the Government and the unions for eventual dismissals, early retirement, voluntary retirement and relocation of personnel. Carrefour has a network of 605 stores and some 20,000 employees.
The plan also contemplates the reconversion of 16 hypermarkets (totaling 79) into wholesale stores, as “part of Carrefour’s global strategy to reduce costs”, interprets Osvaldo del Río, director of Scentia. Juan Vasco Martínez, executive director of ASU (Association of United Supermarkets), explains that the differences in costs between both formats are substantial: “A wholesaler has less staff, low replacement in gondolas and little supply of perishables, which implies lower logistics costs , labor and energy, “he said.
Carrefour was a pioneer: it installed its first hypermarket in 1982 and was the standard bearer of a format that today represents 26% of the total turnover of the chains. The lower traffic, explain the experts, obeys a new profile of consumption that values the time and the proximity of stores to make purchases. Is it the end of the hypermarket? “Some yes, others no, depending on the location,” says Del Río. And he adds that “the price is the main reason why people buy in stores or wholesalers. Today, that variable is confusing, but with a one-digit inflation, the hyper recovers. “
As if they were GPS, the big chains recalculate. A report from the consultancy Kantar Worldpanel indicates that in 2017, wholesalers (Diarco, Vital, Yaguar, Maxiconsumo and Makro) added 500,000 new customers. Carrefour today has 7 “Maxis”, as they call the format. “The last store that Walmart opened in Quilmes is wholesale,” recalls Gizzi of Nielsen. On the other hand, it recognizes that “the swerve in the business” of Carrefour anticipates changes in the entire supermarket channel, much more attentive to the profitability of each square meter of surface.
According to data from Scentia, the chain with the highest number of points of sale is the Spanish Day%: total 941, almost all of proximity focused on daily purchases. The company expanded its network through franchises (close to half) and with a business model based on its own brand products. “It’s 80% of its offer, with good margins, volumes and prices,” says Gizzi.
Format, distances, prices, own brands and services, such as online purchases, are the variables that guide the reconversion of the chains. Almost like a tracing of Carrefour and to face the challenge of Amazon, Walmart also tackled at the global level a plan that contemplates the closing of some stores, the adaptation of others and a jump to the digital channel. In Argentina, the North American chain has 106 points of sale, including 32 hypermarkets.
According to Scentia, the modern channel (supermarket chains and wholesalers) billed $ 340,000 million in 2017. Its networks cover 2,838 points of sale and has 120,000 employees. On the other hand, the traditional channel consists of 24,000 independent self-service stores and 98,000 stores, delicatessens and stores. In this second universe, the big chains coincide, lies the main core of informality, the black market, evasion and unfair competition. Del Río agrees: “They are not all, but there is a business group more oriented towards informality than others. In the fairs and neighborhood markets, the level is very high, “he said.
Industry sources estimate that close to 30% of sales of basic products are made without tickets. The chains themselves maintain that it is the main cause of their problems, even over the slowdown in consumption. Vasco Martínez, from the ASU, puts it in perspective. “Evasion and informality is not new information. The level was maintained, but in times of high consumption it was not so noticeable, “he says. The executive adds that in parallel, “the costs of the chains grew”, limiting on the margins of profitability.