Couche-Tard wants to buy French megaretailer

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Couche-Tard wants to buy French megaretailer

Post by jamcool »

https://csnews.com/couche-tard-initiate ... -carrefour

This is like a guppy (or more appropriately, a dwarf owl) swallowing a whale.
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Re: Couche-Tard wants to buy French megaretailer

Post by mjhale »

What in the world would a convenience store operator want with Carrefour? The article says that Carrefour has some convenience store operations. But the bulk of Carrefour's operations are its hypermarts. Seems incompatible to me.
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Re: Couche-Tard wants to buy French megaretailer

Post by storewanderer »

I would assume they will leave the operations of the hypermarkets and supermarkets to the current management team. If they are profitable businesses it may work out to hold onto them, and just take over the operations of the associated convenience stores.

Couche-Tard generally speaking seems to know what they are doing. Circle Ks are pretty uneven operations, some are fine, but there are a lot of old terrible ones, but they price compete and seem to understand their weak stores need discounted drinks and such to draw customers in. While they killed the "Kangaroo Express" which was a terrible operator of old dirty stores, and the Corner Stores which were clean well run operations but nothing to get excited about, they have kept the Holiday stores which are a stronger operator in every way.
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Re: Couche-Tard wants to buy French megaretailer

Post by pseudo3d »

I wonder, just wonder, if they could bring back the larger Carrefour stores (in some form, not under their old name and certainly not the unusual way they were run in the U.S. prior to their demise) to the United States in some form. There's certainly the retail space for them...
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Re: Couche-Tard wants to buy French megaretailer

Post by buckguy »

Retail is overbuilt in the US compared to any relatively well-off economy. The only way they could succeed here would be by offering something that Walmart, Target, Meijer, etc. don't have. They tried that once and it didn't work out. They did very well in Asia, but that was through joint ventures and entering markets that had nothing like their hypermarts, at the time of entry.
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Re: Couche-Tard wants to buy French megaretailer

Post by BillyGr »

buckguy wrote: January 15th, 2021, 7:44 am Retail is overbuilt in the US compared to any relatively well-off economy. The only way they could succeed here would be by offering something that Walmart, Target, Meijer, etc. don't have. They tried that once and it didn't work out. They did very well in Asia, but that was through joint ventures and entering markets that had nothing like their hypermarts, at the time of entry.
Would probably depend on what that something is. After all, with all the complaints you hear about Walmart, offering the same basic store but finding ways to eliminate the issues that cause the complaints might just be a workable idea...
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Re: Couche-Tard wants to buy French megaretailer

Post by pseudo3d »

buckguy wrote: January 15th, 2021, 7:44 am Retail is overbuilt in the US compared to any relatively well-off economy. The only way they could succeed here would be by offering something that Walmart, Target, Meijer, etc. don't have. They tried that once and it didn't work out. They did very well in Asia, but that was through joint ventures and entering markets that had nothing like their hypermarts, at the time of entry.
Carrefour's attempt in the U.S. was really came in a different time with a VERY different retail landscape (department stores still holding a lot of dominance, Walmart not mainstream, fragmented pre-consolidation grocery market, no online shopping), and something perhaps too different to succeed (the early "hypermarkets" in the U.S. had rather limited SKUs in general merchandise). You can see that "limited SKU" in a Reddit picture of Carrefour back in the late 1980s, notice the bulk product just stacked up at the end corridors.
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Re: Couche-Tard wants to buy French megaretailer

Post by buckguy »

pseudo3d wrote: January 16th, 2021, 4:12 am
buckguy wrote: January 15th, 2021, 7:44 am Retail is overbuilt in the US compared to any relatively well-off economy. The only way they could succeed here would be by offering something that Walmart, Target, Meijer, etc. don't have. They tried that once and it didn't work out. They did very well in Asia, but that was through joint ventures and entering markets that had nothing like their hypermarts, at the time of entry.
Carrefour's attempt in the U.S. was really came in a different time with a VERY different retail landscape (department stores still holding a lot of dominance, Walmart not mainstream, fragmented pre-consolidation grocery market, no online shopping), and something perhaps too different to succeed (the early "hypermarkets" in the U.S. had rather limited SKUs in general merchandise). You can see that "limited SKU" in a Reddit picture of Carrefour back in the late 1980s, notice the bulk product just stacked up at the end corridors.
The US already had hypermarts of one sort or another when Carrefour came over: Fred Meyer in the West, Meijer in the Midwest. One-offs like the Andersons in Toledo (which only had the original store in Maumee). Supermarket chains were experimenting with soft lines and other things as adjuncts to their pharmacies. There had been leased food departments in discount stores like Value City, which also had leased Revco pharmacies. A few department stores had large food selections--Tiedtke's the low end store in Toledo (which really started with food) was one--the model was not that novel.

Walmart has basically alienated all kinds of constituencies, but Target and Meijer already exist as the alternatives. Carrefour would have to offer something a bit more transformational than Walmart and its current competition. They'd also need a web counterpart which isn't easy to build as many chains have shown. Walmart has essentially been in decline for at least a decade---flat store sales (which mean they are losing to inflation), lack of appeal to better off shoppers, poor relationships with communities and coercive relationships with suppliers. There are no cheap new markets for them to enter. They've stumbled with online shopping. Dollar stores are chipping off the edges of their business, esp. in small markets. It will be awhile before all those things finally weaken them visibly--although selling underperforming assets is a sign that problems have deepened. They're like Sears back in the 80s, which was weakened but still a force in the market--it will take a while to be like Sears the flailing mess and Walmart's large family ownership stake might save from private equity for awhile, although the Waltons seem like greedheads who'd cash out for the right price, once institutional investors decide that the dividends are hurting the business.
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Re: Couche-Tard wants to buy French megaretailer

Post by TW-Upstate NY »

buckguy wrote: January 16th, 2021, 6:32 am Walmart's large family ownership stake might save from private equity for awhile, although the Waltons seem like greedheads who'd cash out for the right price, once institutional investors decide that the dividends are hurting the business.
Exactly! Stock price is what "the street" looks at today first and foremost and could care less about dividends because they make their money by trading-constantly buying and selling. Dividend stocks are ones people buy and hold for the income. They're not traded as much and to a money manager they're pretty much worthless.
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Re: Couche-Tard wants to buy French megaretailer

Post by pseudo3d »

buckguy wrote: January 16th, 2021, 6:32 am
The US already had hypermarts of one sort or another when Carrefour came over: Fred Meyer in the West, Meijer in the Midwest. One-offs like the Andersons in Toledo (which only had the original store in Maumee). Supermarket chains were experimenting with soft lines and other things as adjuncts to their pharmacies. There had been leased food departments in discount stores like Value City, which also had leased Revco pharmacies. A few department stores had large food selections--Tiedtke's the low end store in Toledo (which really started with food) was one--the model was not that novel.

Walmart has basically alienated all kinds of constituencies, but Target and Meijer already exist as the alternatives. Carrefour would have to offer something a bit more transformational than Walmart and its current competition. They'd also need a web counterpart which isn't easy to build as many chains have shown. Walmart has essentially been in decline for at least a decade---flat store sales (which mean they are losing to inflation), lack of appeal to better off shoppers, poor relationships with communities and coercive relationships with suppliers. There are no cheap new markets for them to enter. They've stumbled with online shopping. Dollar stores are chipping off the edges of their business, esp. in small markets. It will be awhile before all those things finally weaken them visibly--although selling underperforming assets is a sign that problems have deepened. They're like Sears back in the 80s, which was weakened but still a force in the market--it will take a while to be like Sears the flailing mess and Walmart's large family ownership stake might save from private equity for awhile, although the Waltons seem like greedheads who'd cash out for the right price, once institutional investors decide that the dividends are hurting the business.
Fred Meyer, Meijer, and other one-offs were all regional, The Andersons wasn't a "full" store, despite having some of the most impressive square footage in the industry, their merchandise mix leaned heavily toward hardware and agricultural-style hard goods. An attempt to push soft lines in the early 2010s came at the expense of toys and sporting goods, and ultimately that failed before they pulled the plug on the operation. Even the discount stores usually had their food departments with separate checkouts.

Both Kmart and Walmart's "original" hypermarket projects (American Fare and Hypermart USA, respectively) were very different in merchandising than their homegrown discount stores with a grocery department, and eventually those were phased out in favor of the "Super" model that was prototyped around the same time.

The landscape now has Meijer still very regional (very slow expansion), Target's merchandise mix so brutalized it's barely a discount store, and Walmart as a national but mediocre powerhouse. Most of the grocers seem to be focused on making their stores more like Wegmans (big focus on perishables) and less focus on adding new categories. Kroger seemed to be trying to make progress in the latter, but now construction of the big "Marketplace" stores have all but stopped and even Fred Meyer has lost a lot of what made it unique.

Walmart's problems have been visible, and they are easy to exploit, mostly by building a solid grocery component (which Carrefour seems to do okay, though merchandising would be very different), a good online component, a useful GM selection (with soft lines), and marketing not based on low prices (because when pressed, Walmart can undercut it). Being entirely new can both solve the problems of not being a grocery store selling non-food items (this is probably why grocers have had a hard time doing GM) and not having an existing reputation (this was a major setback for Super Kmart, because despite for the most part being nice, clean, and modern stores on par with other supermarkets feature-wise, it still had Kmart's "old and dirty store" reputation working against them).
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