France's Carrefour Group, the world's number two retailer in terms of sales after number one Wal-Mart, Inc., is taking a mega-"no frills" approach to the small-format Carrefour Express grocery stores it's opening throughout Asia.
As you can see in the photograph above, Carrefour's Express grocery stores in most parts of Asia look no different than a mom and pop neighborhood grocery store, nor are they any bigger, which is by design.
In fact, were it not for the large red, white and blue Carrefour sign on the grocery store, one would assume its just another family-owned Asian grocery market. Carrefour means junction in English.
The store in the photograph at the top of this story is located in Wangsa Maju Section 2 in Pand Indah, Kuala Lumpur, Malaysia. The small-format Carrefour Express neighborhood grocery store in an urban mixed residential and commercial neighborhood. Notice the businesses and apartments above the store, with the window-mounted air conditioners?
The Carrefour Express stores are designed to offer the basic essentials for neighborhood residents. The stores mostly stock food and grocery products, with a small selection of non-foods as well.
The petite grocery stores carry fresh fruits and vegetables. Some of the Express stores sell fresh meats and fish, others don't. It depends on the neighborhood the grocery market is located in.
The format is more than a convenience store model however, which there are many of in Asia, including in Malaysia.
The Carrefour Express' format is "grocery necessities at affordable prices," in a phrase. More than a convenience store but less than a larger supermarket. The stores' prices also are more in line with Carrefour's hypermarts and supermarkets rather than the same (meaning lower) than those at convenience stores in the region's neighborhoods.
Carrefour also operates huge hypermarts and large supermarkets throughout Southeast and Central Asia, in addition to le petite Express stores.
The small-format, convenience-oriented Express format is designed to fit with the French retailer's multi-format strategy. In urban and rural areas where hypermarts or supermarkets aren't appropriate, the group will locate a Carrefour Express grocery store, for example.
The small stores, which range from about 3,500 -to-10,000 square feet, are becoming an important part of Carrefour's urban retailing strategy throughout Asia. And, of course, in many large, highly-dense cities, where space is at a premium, the Express grocery stores allow the retailer to have a food retailing presence it cannot have with its larger stores. There's no room for the hypermarts or supermarkets in such urban regions and cities.
Carrefour Group operates various types of retail format stores throughout the globe. In addition to its home base in Western Europe, the retailing group has retail operations and stores in Eastern Europe, the Middle East, Africa, Central and Latin America.
Like number one Wal-Mart and Tesco, which is the world's number three retailer, Carrefour is a broadline retailer that sells everything in its stores (depending on the format) from food and groceries, to kitchen appliances, electronics, books, clothing and more.
Also like Wal-Mart and Tesco, the retailer operates a number of different formats, ranging from hypermarts, which it pioneered in retailing, to discount stores, supermarkets, Cash & Carry stores and the small-format Carrefour Express grocery markets.
Carrefour Group had sales of about $92.6 billion in 2007. By comparison, number three United Kingdom-based Tesco's 2007 gross sales were $69.6 billion.
U.S.-based mega-retailer Wal-Mart had 2007 sales of $312.40 billion, over three times that of Carrefour Group's. An interesting fact is Carrefour has nearly twice as many stores (about 12,190) globally as Wal Mart does. Wal Mart has about 6,420 stores in the U.S. and abroad. Tesco operates about 2,500 stores in the UK and internationally.
Carrefour plans to increase the number of its Carrefour Express stores in Asia, as the company reports they are doing well and fit a particular niche, as we described above.
As we first wrote last August, there's an international small-format food and grocery retailing revolution--as is there one in the United States--occurring, being led by the world's top retail chains.
Tesco is the leader in this retailing revolution with its Tesco Express grocery stores in Europe and soon to be in Russia, as well as its Fresh & Easy Neighborhood Market small-format, convenience-style grocery stores in the U.S.
Wal-Mart will soon join the small-format grocery store retailing revolution when it opens its first 15,000 -to- 20,000 square foot Marketside grocery stores this summer in Phoenix, Arizona in the U.S.
And of course, Carrefour is increasingly becoming a major international player with its Carrefour Express small-format grocery stores.
That's the top three retailers in the world folks; all participants in small-format food and grocery retailing.
Joining these top-tier retailers in the small-format revolution are a numerous grocery chains of all sizes, shapes and form globally.
In the U.S., SuperValu, Inc., the number two supermarket chain in the nation, operates hundreds of small-format discount grocery stores under the Sav-A-Lot banner.
Safeway, the number three supermarket chain in the U.S., plans to introduce its first small-format grocery stores this summer in the San Francisco Bay Area. We haven't learned the name of the stores yet, but you can read our latest piece about the development here.
Lets not forget the Germans, Aldi and Lidl. Aldi is a small-format discount grocery store powerhouse, with stores in Europe, Australia and the United States. Lidl, Aldi's chief competitor in Germany, also is a European small-format discount grocery store powerhouse. It operates the powerful little discount stores throughout Europe, and is having a big impact currently on food retailing in the United Kingdom.
We expect to not only see the retailers mentioned above continue to open additional small-format grocery stores in the global and domestic regions in which they operate. We also suggest you will see many of these players expand out into other countries and markets with their small-format stores.
More new players are coming into the small-format food and grocery retailing arena as well. These include retailers like Whole Foods Market in the U.S., which soon will open its first 15,000 -to- 20,000 square foot Whole Foods Express store in Boulder, Colorado in the U.S.
Stay tuned. The international small format food and grocery retailing revolution may not be televised. But we cover it regularly, write about it often, and provide comprehensive analysis always here on Natural~Specialty Foods Memo.