Slide 1: Food
Food a 94 groupecarrefour
Slide 2: Contents
Contents Rethinking our dry grocery What we are doing Results to date Roll out Rethinking our fresh offer 62
Slide 3: Why rethink our dry grocery?
Why rethink our dry grocery? To better meet the needs of customers who are looking for : Innovation A wide choice of products and good availability Competitive prices With a goal to : Improving sales/ m² and profitability in dry grocery Securing the means to compete more effectively whatever the com
Slide 4: Our challenges
Our challenges Sales productivity in dry grocery is one of the highest (around 11,000 € per sqm) Compares very well to global peers We are the leader in France The market for dry grocery is characterised by : Low volume growth Changes to the legislative environment How can we do even better while re
Slide 5: Agenda
Agenda Rethinking our dry grocery What we are doing Results to date Roll out Rethinking our fresh offer 65
Slide 6: We are maximising profitability per m²
What we are doing We are maximising profitability per m² thanks to: 1. Increasing shelf space 2. Assortments : national brands and own label 3. Innovation 4. Cross selling 5. Pricing 6. Shelf-ready packaging 7. Optimising operational efficiency 8. Communication 66
Slide 7: Increasing shelf space: making the offer more dense
What we are doing 1. Increasing shelf space Making the offer more dense: Number of new fixtures added Number of new SKUs added Drinks 4 +3% +2% 37 6 +10% +9% Pharmacy 107 Perfumery 12 +11% 741 +17% Dry 24 +9% 589 +11% Dairy 30 +17% +13% 438 Total dry 76 +11% 1912 +12% grocery + 76 fixtures + 1912 SK
Slide 8: Assortments: national brands and own labels
What we are doing 2. Assortments: national brands and own labels Increasing assortments 1500 additional SKU’s per year between 2005 and 2007 Identifying growth categories for the group and for the store Organic 850 organic lines added Ready-to-eat: +14% increase in sales of sandwiches +37% increase
Slide 9: Innovation drives growth in sales
What we are doing 3. Innovation Innovation drives growth in sales Innovation accounts for more than 3% of dry grocery sales growth annually Customers love innovation as long as it is meaningful: 90% of customers regard innovation as a major factor in the quality of their lifestyle* We have the best
Slide 10: Innovation: Launch of Gillette Fusion
What we are doing 3. Innovation: partnerships with national brands Launch of Gillette Fusion: 29% market share versus 18% for Health and Beauty 70
Slide 11: Innovation: Launch of Coke Zero
What we are doing 3. Innovation: partnerships with national brands Launch of Coke Zero: 34% market share versus 16% for liquids 71
Slide 12: Innovation: own label
What we are doing 3. Innovation: own label + 700 SKUs in 2007: an own label range offering new products, packaging and tastes Promoting innovation through in-store theatre 72
Slide 13: Cross Selling
What we are doing 4. Cross Selling Encouraging impulse buying Increasing both sales and profits 73
Slide 14: Pricing
What we are doing 5. Pricing Local price leadership is a non-negotiable priority We use a weighted index adjusted for local and seasonal factors We constantly benchmark the prices of own labels 74
Slide 15: Shelf-ready packaging
What we are doing 6. Shelf-ready packaging Definition Eliminating unnecessary handling of product between supplier and shelf Objectives Improving customer satisfaction while reducing out-of- stocks on high turnover lines Improving profitability by increasing volumes per SKU Rolling out shelf-ready p
Slide 16: Shelf-ready packaging: our targets
What we are doing 6. Shelf-ready packaging Our targets: 35% of dry grocery volumes in shelf-ready packaging by the end of 2007 170 SKUs in half palettes by the end of 2007 60% of dry grocery volumes by the end of 2009 76
Slide 17: Optimising operational efficiency
What we are doing 7. Optimising operational efficiency: reducing out- of-stocks and optimising inventory levels in stores Objectives: Improve customer satisfaction Improve profitability Significant reduction in excess inventory Tools: More theatre in-store: allocation of end-aisle displays Better pr
Slide 18: Communication: improving the clarity of the offer
What we are doing 8. Communication Improving the clarity of the offer More « buy one, get one » free promotions to reinforce price image, particularly at the end of the aisle Before After 78
Slide 19: Communication: clearer signage
What we are doing 8. Communication Improving the clarity of the offer Clearer signage 79
Slide 20: Making direct contact with the customer
What we are doing 8. Communication Making direct contact with the customer Price Alert Loyalty card Website 80
Slide 21: Contents
Contents Rethinking our dry grocery What we are doing Results to date Roll out Rethinking our fresh offer 81
Slide 22: Results to date
Results to date 14 stores converted in 2006 105 stores converted at the end of 2007 All stores converted by mid 2009 On average 2% better growth than like for like sales improvement in unconverted stores Basket size up Increase in « share of wallet » Local market share gain (on average 0.3%) Commerc
Slide 23: Contents
Contents Rethinking our dry grocery What we are doing Results to date Roll out Rethinking our fresh offer 83
Slide 24: Roll out
Roll out 2007 2008 2009 French hypermarkets 105 160 218 French supermarkets 165 320 500 Total Group 400 700 1200 84
Slide 25: Contents
Contents Rethinking our dry grocery What we are doing Results to date Roll out Rethinking our fresh offer 85
Slide 26: Fresh food reorganization (since 2005)
Fresh food reorganization (since 2005) More staff in store Specific training and coaching rolled out to all employees and managers New organization for purchasing/ sales at headquarters Sales driven by strong commercial repositioning 86
Slide 27: Creation of Engagement Qualité Carrefour
Creation of «Engagement Qualité Carrefour» Engagement Qualité Carrefour: 20% of purchasing in fresh produce (ex bakery) 75 products 25 000 manufacturers 2008 development 87
Slide 28: We are changing all our concepts
We are changing all our concepts Concepts which we have already been rolled out Traditional butcher Flower shop Fishmonger Faims de journée Catering 84 at the end of 2007 55 at the end of 2007 22 at the end of 2007 113 at the end of 2007 60 at the end of 2007 Concepts that are being developed Cheese
Slide 29: Results since the repositioning
Results since the repositioning Fresh food sales have grown by 5% on average over the last three years We are reinforcing further our fresh own labels, with +10% of SKUs planned for 2008 89
Slide 30: Conclusion
Conclusion By re-thinking our food model we are able to grow sales and improve profitability per m2 We are building on our traditional strengths We are better equipped than ever to take market share on a regular basis 90