Carrefour Sa · EURONEXT:CA
Carrefour Sa — Investor Day (June 2005)
57 slides from Carrefour Sa's investor day presentation, Jun 30, 2005
Slide 1: Investor day 30.06.2005
1 Investor day / 30.06.2005
Slide 2: Carrefour Investor day 30th June 2005: First session
CARREFOUR Investor day 30th June 2005 First session Satisfying the customer 2 Investor day / 30.06.2005
Slide 3: First session: Satisfying the customer
First session Satisfying the customer : price, product, service and communication – Understanding the customer / Guy Yraeta – Building price image / Javier Campo – Developing the assortment / José-Maria Folache 3 Investor day / 30.06.2005
Slide 4: Satisfying the customer: Understanding the customer
CARREFOUR Satisfying the customer Understanding the customer Guy YRAETA 30th June 2005 4 Investor day / 30.06.2005
Slide 5: Understanding the customer: key messages
Understanding the customer: key messages • The customer is at the core of our efforts to grow the business • In recent years, we have developed the know-how to understand customer behaviour and to leverage this insight into business decisions • The aim of this strategic process is to achieve a profi
Slide 6: Carrefour puts the customer at the centre
Carrefour puts the customer at the centre Understanding the customer is a strategic priority 1 • Understanding the customer drives profitable and sustainable growth because it allows us to have more customers, and to increase customer value and loyalty 2 • Loyalty is the result of the sum of the cus
Slide 7: Understanding the customer drives profitable and sustainable growth
Carrefour puts the customer at the centre 1 Understanding the customer drives profitable and sustainable growth for the group • Customer knowledge allows us to: – Identify the best customers in terms of value and potential, and retain them – Recruit more customers, because we know which households t
Slide 8: Loyalty is the sum of positive experiences, not only a loyalty card
Carrefour puts the customer at the centre 2 Loyalty is the result of the sum of the customer's positive experiences and not only the result of a loyalty card Attractive prices Loyalty card Promotions Citizenship Choice Solidarity Quality, freshness Trust New products Entry-price brands Product follo
Slide 9: Sources of information to understand the customer
Carrefour puts the customer at the centre 3 There are several sources of information which enable us to understand the customer … Awareness, penetration, share of wallet Pre- and post-campaign test Competition Competition watch Image studies In store Trends and Daily Demographic trends Call centre p
Slide 10: Customer database answers key questions
Carrefour puts the customer at the centre 3 …but only a customer database allows us to respond to certain key questions Who are our best customers, those How much do with the strongest they spend? potential? How do they associate different product categories On what days and at what together? time d
Slide 11: Use of the loyalty card goes beyond promotions
Carrefour puts the customer at the centre 3 The use of the loyalty card goes beyond promotions • Tip of the iceberg: – Promotions of the loyalty program to all cardholders • Immerged part of the iceberg: – Using the customer database for: • Geomarketing • Targeted coupons • Relationship programs • P
Slide 12: Understanding the customer: key messages
Understanding the customer: key messages • The customer is at the core of our efforts to grow the business • In recent years, we have developed the know-how to understand customer behaviour and to leverage this insight into business decisions • The aim of this strategic process is profitable and sus
Slide 13: Group has developed significant and unique know-how: loyalty programs
In recent years, the Group has developed significant and unique know-how Our know-how is based on loyalty programs adapted to our various formats... Dia Champion France GS Italy Carrefour France Club Dia IRIS SpesAmica Club Card Carrefour Card name 1998 in Spain 2000 (merger of "Iris 1996 Spring of
Slide 14: Other valuable sources of information
In recent years, the Group has developed significant and unique know-how And by other important and valuable sources of information France – Studies on competitors' Spain customers related to their – Tracking the banner image with a panel perception of Dia of 30,000 customers twice a year – Phone su
Slide 15: Business units that have launched loyalty programmes
In recent years, the group has developed significant and unique know-how Several business units have already launched loyalty programmes Belgium France Italy Portugal Turkey* Greece Indonesia* Argentina *On payment cards 15 Investor day / 30.06.2005
Slide 16: Understanding the customer: key messages
Understanding the customer: key messages • The customer is at the core of our efforts to grow the business • In recent years, we have developed the know-how to understand customer behaviour and to leverage this insight into business decisions • The aim of this strategic process is to achieve a profi
Slide 17: Strategic process aims at profitable and sustainable growth
This strategic process aims at profitable and sustainable growth Understanding the customer is a strategic priority 1 • Understanding the customer opens new perspectives: it can have an impact on format, category mix, store services and targeted promotions, and therefore on several other strategic p
Slide 18: Customer insights leveraged differently by format and market
This strategic process aims at profitable and sustainable growth Our customer insights are leveraged in different ways in different formats and markets Hypermarkets France Exploitation of Sources of customer insights customer insights Impact on... Mechanism –Growth... –Growing market share by increa
Slide 19: Customer knowledge and relations by format and market
This strategic process aims at profitable and sustainable growth Customer knowledge and relations are used in different ways in their various formats and markets Key mechanisms Distinctive elements – Accumulation of points and double pricing on products in catalogue – Targeted couponing based on cus
Slide 20: Understanding the customer: key messages
Understanding the customer: key messages • The customer is at the core of our efforts to grow the business • In recent years, we have developed the know-how to understand customer behaviour and to leverage this insight into business decisions • The aim of this strategic process is to achieve a profi
Slide 21: System to reinforce programs and accelerate roll-out across business units
We have put in place a system which leverages our expertise in order to reinforce existing programs and accelerate their roll our across other business units • Assists the B.U.s in the development and improvement of their programmes Creation of a Customer • Updates the best practices "toolkit" Insig
Slide 22: Understanding the customer: key messages
Understanding the customer: key messages • The customer is at the core of our efforts to grow the business • In recent years, we have developed the know-how to understand customer behaviour and to leverage this insight into business decisions • The aim of this strategic process is to achieve a profi
Slide 23: Investor day 30.06.2005
23 Investor day / 30.06.2005
Slide 24: Satisfying the customer: Building price image
CARREFOUR Satisfying the customer Building price image Javier CAMPO 30th June 2005 24 Investor day / 30.06.2005
Slide 25: Why the business model dry grocery/price image programme?
Why the programme “business model dry grocery/price image”? Why is this programme Why is this programme a strategic for the group ? fundamental change? • Winning the “price image” battle in • Because it brings a consistent plan to hypermarkets and supermarkets is the 5 components of the price image
Slide 26: Goal of the business model dry grocery/price image programme
The goal of the “business model dry grocery/price image” programme Increase the competitiveness of our banners with a discount policy geared to each format – With a more competitive price image – With more dynamic product innovation 26 Investor day / 30.06.2005
Slide 27: Table of content
Table of content Strengthening the discount / price image Speeding up product innovation Improving productivity 27 Investor day / 30.06.2005
Slide 28: Constructing the assortment
Constructing the assortment • Working on dry grocery assortments to meet market and customer expectations • Increasing the proportion of private label with the goal of constructing genuine private label brand recognition well adapted to each format • Adapting our merchandising plans to maximise our
Slide 29: Working on price sensitivity
Working on price sensitivity • Systematically basing the price strategy of each format on consumer analyses of what drives price image – For example, understanding the importance of fresh goods (fruits & vegetables, meats), private label, one-off non-food promotions,… • Basing pricing on the detaile
Slide 30: Developing price sensitivity
Developing price sensitivity Customers’ top 4 criteria for building price image are: • EDLP strategy • Fresh product price competitiveness • Reliability and quality of the price indications • Price competitiveness of the private label range 30 Investor day / 30.06.2005
Slide 31: Communicating targeted prices
Communicating targeted prices • Focusing on a limited number of powerful messages which are simple, easily readable, and avoid “a forest of messages” • Demonstrating the commitment of the banner to lower prices (eg recent 3 for 2 promotions in French hypermarkets, “100% remboursable” from Champion i
Slide 32: Targeted promotions per format
Targeted promotions per format • Focusing on promotional mechanisms which are the most effective per format • Focusing umbrella operations with simple and unique mechanisms in catalogues and at the end of aisle displays • In non-food, focusing on one-offs and rounded up prices • Emphasizing private
Slide 33: Table of content
Table of content Strengthening the discount / price image Speeding up product innovation Improving productivity 33 Investor day / 30.06.2005
Slide 34: Guiding principles behind product innovation
Our guiding principles behind product innovation • Innovate proactively • Bring life to our ranges with an obsession for private label innovation and national brand innovation to better meet our customer’s expectations and accelerate growth • Set up innovation intelligence – Follow food consumption
Slide 35: Guiding principles behind product innovation
Our guiding principles behind product innovation Focus Innovation on national markets and private labels • Adapt our processes and organisation to reduce the delay in developing private labels • Regularly renew the private label ranges • Increase our market share in innovative national brand product
Slide 36: Business model dry groceries / price image: key messages
Business model dry groceries / price image: key messages • We need to win the “price image” battle in each format using all our tools coherently – assortments and store locations – Development of private labels Strengthening the – Disciplined pricing discount / price image – Communication focused on
Slide 37: Conclusion
Conclusion • Building price image is a critical task across all formats and in all countries where we choose to trade • Strong price image drives traffic and enables us to win market share • Our efforts to reduce cost support our price initiatives while innovating faster, better and at a lower cost
Slide 38: Investor day 30.06.2005
38 Investor day / 30.06.2005
Slide 39: Satisfying the customer: Developing the assortment
CARREFOUR Satisfying the customer Developing the assortment José-Maria FOLACHE 30th June 2005 39 Investor day / 30.06.2005
Slide 40: More than a competitive dry grocery offer in hypermarkets
We must do more than just offer a competitive dry grocery offer in hypermarkets Distribution of Hypermarket sales by department 2004e, % 100% = € 42 174 M Apparel General Opportunities: Merchandise 7 14 –Create differentiation Dry 46 –Improve EBIT 17 Grocery Consumer –Increase sales Electronics 16 F
Slide 41: Expertise we already have (1/2): apparel Spain
There is a lot we can do with the expertise we already have (1/2) Sales trend apparel Spain EBIT trend apparel Spain Millions Euros As a % of sales 648 608 518 505 525 2000 2001 2002 2003 2004 2000 2001 2002 2003 2004 The number of customers buying apparel increased from 17% to 21% 41 Investor day /
Slide 42: Expertise we already have (2/2): consumer electronics Belgium
There is a lot we can do with the expertise we already have (2/2) Sales trend Consumer Electronics Belgium EBIT trend Consumer Electronics Belgium Millions Euros As a % of sales -6% 314 319 310 2002 2003 2004 2005 E 295 2002 2003 2004 2005E 42 Investor day / 30.06.2005
Slide 43: This is a very important opportunity
This is a very important opportunity • We must respond better to our customers’ expectations… • …to achieve a level of profitability which permits us to re-invest in dry grocery while remaining profitable… • …in order to contribute to the group’s growth objectives 43 Investor day / 30.06.2005
Slide 44: Hypermarket as a living space where everything and unique coexist
We must make the hypermarket a living space where "everything" and the "unique" coexist …while developing a specialized To fulfil the Carrefour promise… offer in key areas – Cutlery for daily use – “Living” spaces – Price / quality – A differentiated offering – A presentation which encourages the cu
Slide 45: Four key steps to optimise the customer's store experience
Four key steps to optimise the customer’s experience of our stores • Provide clear choices in each format and in each market geared to the needs of the family • Construct a targeted offering within a generalist environment to differentiate the Define a banner detailed sales plan at store level • Mas
Slide 46: Principles common to apparel, general merchandise and electronics
The principles common to apparel, general merchandise and consumer electronics Provide clear • Making choices between categories and sub-categories for each format, with the needs choices of the customer at the heart of the decision-making process • Constructing "living" hypermarkets : a full offer
Slide 47: The challenge of general merchandise
The challenge of general merchandise • To offer the same range as retail specialists across 10 categories, we would need 25,000 m2 in general merchandise • The need to make choices between • The product life cycle varies category by category : categories – The large seasonal categories • To use the
Slide 48: Zones dedicated to special events
Zones dedicated to special events Special events in Carrefour Argentina – 6 categories were chosen for this special event – Each store regularly stages special events – We work in partnership with our suppliers 48 Investor day / 30.06.2005
Slide 49: The challenge of apparel
The challenge of apparel Implications for the business model • Construction of our own • Understanding the importance of fashion targeted offering which trends and responding to the lack of – Reassures (basic 50%) differentiation by brand in our (mainly own label) apparel offer – Seduces (fashionabl
Slide 50: Understanding the importance of fashion
Understanding the importance of fashion Carrefour Argentina 50 Investor day / 30.06.2005
Slide 51: The challenge of consumer electronics
The challenge of consumer electronics Implications for the • We need to respond to customers who business model are looking for innovation and service : – 25% of sales in Europe represent models • Focusing on innovation : introduced during the course of the year – Building the offer – 40% of sales a
Slide 52: Merchandising new concepts
Merchandising new concepts Carrefour Korea 52 Investor day / 30.06.2005
Slide 53: Additional customer services
Additional customer services 53 Investor day / 30.06.2005
Slide 54: Developing customer services for three key reasons
We are developing customer services for three key reasons • Developing additional sales through customer services which make To strengthen the shopping in our hypermarkets easier core business - For example : store credit, complementary insurance (GSM, trolleys, animals…), guarantee extensions • Str
Slide 55: Three ways to develop customer services
These are three ways to develop customer services Models Examples 1 Internal development Voyages France Developing in partnership Financial Services 2 with experts Italy DVD Rentals Carrefour as a distributor 3 Carrefour on-line (with or without co-branding) Spain 55 Investor day / 30.06.2005
Slide 56: Conclusion
Conclusion • In our hypermarkets, offering a competitive dry grocery offer is essential, but it is not enough • We are developing assortments in non-food which are more attractive to our consumers, and which drive traffic • The goal is to achieve a level of profitability which permits us to re-inves
Slide 57: Investor day 30.06.2005
57 Investor day / 30.06.2005