French supermarket giant Carrefour is reportedly looking to sell its Polish operation, which is one of the largest retail chains in the country.
In response to the reports, which first appeared in French business magazine Challenges, the firm admitted that it is analysing “possible future consolidation, alliances or divestments” in Poland, but said that no final decision had been made
According to experts, the chain was “disappointed with Poland” as it trails behind other larger retailers. “It is only interested in the markets in which it can dominate,” said one company insider quoted by Money.pl, a financial news website.
Carrefour is reportedly also considering selling its operations in Taiwan, Italy and Argentina, where it has likewise failed to reach a critical mass.
With 923 stores in Poland – both big-format supermarkets and smaller local stores – Carrefour trails behind larger players including Żabka (7,272), Biedronka (3,130) and Dino (1,532). But it has more outlets than Lidl (768), Netto (383), Kaufland (225), Aldi (168) and Auchan (74).
Last year, British retail chain Tesco also announced that it would leave the Polish market, with Danish-owned Netto taking over 301 of its stores, two distribution centres and its main office.
Carrefour’s last financial report shows that in 2019 its Polish operation made a revenue of 9.62 billion zloty (roughly €2.1 billion) and a profit of 210 million (€47 million). By comparison, the owner of the Biedronka discount chain, Jeronimo Martins Polska, recorded respective figures of 55.6 billion and 2.24 billion zloty.
“Poland is not a huge market for Carrefour,” noted another anonymous industry insider, quoted by Money.pl. Globally, the French chain has 12,200 stores, which bring in €80 billion of revenue.
Despite retail being squeezed by the pandemic last year, the number of discount stores and supermarkets with floor space between 40 and 100 square metres – like the Carrefour Express format – has been multiplying in Poland, according to NielsenIQ, a market data agency.
Last week, a new player entered the convenience market. Poland’s state-owned oil giant PKN Orlen, which runs a large network of petrol stations, launched its first stand-alone store to diversify into retail. It aims to open hundreds more over the next five years.
It remains unclear who could take over Carrefour’s stores. The chain’s outlets, which are largely in cities and shopping centres, could in many cases be located too close to existing branches of other chains, which would then risk cannibalising their own business.
Moreover, a transaction on such a scale would need to be approved by Poland’s anti-trust watchdog. A senior manager from a competing retailer told Notes from Poland that the authority was unlikely to approve a takeover by, for example, Auchan, unless it broadened its definition of what constitutes a “market” from specific sectors to all of retail.
It is thus possible that the company could sell off its operation by parts or sell to a new entrant on Poland’s market. Moreover, unlike Tesco, a number of Carrefour’s outlets are operated as franchises, which could complicate any bulk sell-off.
Main image credit: Carrefour (press materials)
Maria Wilczek is deputy editor of Notes from Poland. She is a regular writer for The Times, The Economist and Al Jazeera English, and has also featured in Foreign Policy, Politico Europe, The Spectator and Gazeta Wyborcza.
