Retail in Asia

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Is Carrefour making a tactical retreat from India?

It’s not often that Jean Noel Bironneau, the managing director of Carrefour India, makes public statements. So, when a few days ago, it came to light that he had told his employees not to pay attention to "rumours" about Carrefour’s exit from India, much curiosity was generated about the French retailer’s fate in the country. In spite of what Bironneau told his employees, industry sources and analysts are making a strong case for why it makes sense for the EUE76-billion (USD104.66b) company to stay away from India – at least for now.

Carrefour, the second largest retail chain in the world after US’s Walmart, entered India with the aim of opening supermarket stores which in bureaucratese are called multi-brand retail outlets. But all it did was open a handful of cash & carry (official jargon for wholesale) stores. "It is still very much a multi-brand player, while cash & carry remains just a stop-gap arrangement for the group," a source says.

To be fair, several multinational retailers – Walmart, Carrefour and Tesco – are keen to get a slice of India’s USD600-billion retail pie through hypermarkets and supermarkets. But the sector was kept closed for foreigners till 2012. The argument was that foreign retailers would finish off small Indian grocers in no time with their predatory pricing. Most retailers, while lobbying the government to open up multi-brand retail, sought to get a toehold in the market through cash & carry stores.