Carrefour Expanding in the Middle East

A report by the Qatar government illustrates the strategic positioning of Carrefour as a mega retailer.

In Qatar, for instance, Carrefour as noted as officially noted as having the lowest prices in the country for essential goods. Carrefour could pose serious threats to foreign retailers that wish to expand here, and existing local retailers like Al Meera and Lulu, according to AME.

One of our analysts who has lived and worked in this part of the Middle East has confirmed the rise of Carrefour as a mega retailer in the GCC. He states that stationed in almost every major mall in key markets, such as Dubai, Abu Dhabi, Sharjah, Qatar and Bahrain, and is successful in attracting families to their shopping centers. To maintain this growth, Carrefour is aggressively expanding in key GCC markets.

Beyond the Middle East, the retailer has successfully penetrated Asia.

In China, attracting China’s Middle class and developing a strong market positioning of a modern shopping experience. Carrefour had an expansion increase of 25.9% in the China Market for the Third Quarter 2007. The group also is emerging in Latin America, in Brazil, Argentina and Colombia.

Financially, the Group saw international overall sales increase by 5.5% on constant exchange rates and by 5.8% on current exchange rates. Latin American sales overall dramatically increased, up 49.3% on constant exchange rates. Moreover, Brazil’s total sales increased 57.1% on constant exchange rates. Globally, Carrefour opened 385 stores just in Quarter 3, 2007.

The question emerges: Where is the world’s largest retailer Wal-Mart to directly compete on a global basis against this formidable competitor?

Competition in Grocery and Retail Markets

Given Carrefour’s successful expansion into the Middle East and South East Asia, it would seem that Wal-Mart is missing other global growth opportunities. Its non-U.S. stores seem to be largely clustered in China, Brazil, Japan and Central America and the UK. Whether because of a fear of American consumer retaliation if Wal-Mart were to operate in the Middle East or a lack of research of the GCC market growth potential, it seems that Wal-Mart is avoiding the Middle East/GCC Market.

According to AME, the Retail sector in the GCC is currently worth $100 billion, second in industry size to the Oil and Energy industry. By 2009, Dubai’s shopping malls alone plan to take in $7.6bn, and the average sales-floor space in Dubai will be 16 times more than that of top 25 economies in the European Union.