“Acquisitions may continue”

Luc De Noirmont is the person at the helm of CarrefourSa, one of the most important retail giants in Turkey. Servet Topaloğlu, one of the doyens of the sector, is responsible for the new era in Carrefour’s supermarkets. These two powerful names aim to double the size of CarrefourSa’s operations within three years. Luc De Noirmont says: “We began acquisitions in Turkey and in the future acquisitions in the sector will continue.” Capital brought together the two men at the head of this giant organisation and spoke with them about their plans for the new period.

Luc De Noirmont has been general manager of CarrefourSa since 2004. Noirmont’s agenda has been extremely hectic since the acquisition of Gima. In fact, this move was part of a strategy developed at Carrefour at the end of 2004. Noirmont says that CarrefourSa’s desire to expand and reach every city played a role in this acquisition The main reason for them opting for Gima was the company’s supermarket network in Turkey. Noirmont believes that the most important factor in securing the agreement with the Fiba Group was their ability to make a decision quickly during the acquisition process.

“With this move, we are planning to double our turnover in three years,” says Noirmont. He adds that, in order to achieve this, they are first going to double the number of their hypermarkets and supermarkets. Noirmont notes that that they have concentrated on the integration of Gima and Carrefour and continues as follows: “At the moment we working to complete the integration of the Gima operation in a sound manner. We shall try to operate the Gima stores with a different concept. We shall differentiate ourselves from the other players in the market. We shall continue to expand by opening new stores. We aim to double the number of our hypermarkets. For this reason, from this year onwards, we are planning investments of €100 million on an annual basis.”

We spoke with Luc de Noirmont about the size of the CarrefourSa operation, its plans for the future and competition in the sector.

* CarrefourSa has recently celebrated its 13th year in the sector. What is the size of its total investment in Turkey to date?
CarrefourSa has invested $1 billion in Turkey to date.

* As a result of an agreement with the Fiba Group you acquired the Gima and Endi stores in a surprising manner. Can we say that it was your speed during this process which enabled you to secure the deal?
We can say that we were very motivated on this subject. The reason that we were so aggressive during this process was such an acquisition was part of our strategic business plan. At the end of 2004 we discussed with the high level management of Carrefour about the acquisition we would make in the supermarket field. We had two alternatives: Tansaş and Gima. Gima was our first choice. As you said, during the acquisition process our ability to make a decision quickly helped us.

Carrefour’s operations all over the world are extremely flexible. If you recall, we took the decision to make the acquisition between Friday and Tuesday morning with the support of all of our units in Turkey and all over the world.
* How did CarrefourSa close 2005 in terms of turnover and the number of its employees? How did your turnover change after the acquisition?
After the acquisition of Gima, Carrefour’s turnover increased by 40 percent. At the moment we have a total turnover of $1.43 billion. Before the acquisition our turnover was $850 million. We employ a total of 7,500 personnel in all of our stores.

In terms of the number of our products. At the moment we offer consumers over 50,000 products in our hypermarkets. In 2005, more than 125 million people visited all of CarrefourSa’s stores.

Our acquisition means that we have begun operations in all the fields of hypermarkets, supermarkets and discount markets. The supermarket format has a very important place in the Turkish market. This acquisition means that we now have the opportunity to meet the desires and the needs of more consumers. We have a network which enables us to reach every place in Turkey, not just in large cities such as Istanbul and Ankara.

* What is the total number of CarrefourSa stores? What share of these do supermarkets account for?
At the moment we have 470 stores of all formats. 13 of these are hypermarkets, 89 supermarkets and the rest are discount markets. Gima owns 81 of the supermarkets and Champion 7.

* What is CarrefourSa’s market share and position on the market? What was it before the acquisition of Gima?
We have a 15 percent market share. Before the acquisition of Gima our market share was 9 percent. CarrefourSa is currently one of the two most powerful players on the market.

* Could you give some information about the size of the total market?
The size of the rapid consumption sector is $22 billion. The size of the organised retailing sector, which includes all chain stores, is $10 billion. According to data from AC Nielsen, there are 6,474 hypermarkets, chain stores and supermarkets. The number of markets, which are described as having an area of 50-100 square metres, is 14,775. The number of corner stores with an area of less than 50 square metres is 116,857. As you can see, there are a lot of players in the market. But there are specific companies in the front rank.

* On a global scale, Carrefour’s rivals appear to be the US-based Wal-Mart, the British Tesco and the German Metro. Wal-Mart is strong globally in the field of distribution. Metro concentrates on cash and carry. Tesco is known as being strong in supermarkets. What is Carrefour’s strength and different business model?
Over 50 percent of Carrefour’s operations are outside France. That means that we are an international company in the full sense of the term. 80 percent of Wal-Mart’s operations are in America.

In addition to this, our greater strength is as a retailer of foodstuffs. The store concept of Carrefour creates an important difference. We are developing a new concept every day. In the foodstuffs category we are experts in fresh products in particular. This also increases our popularity with the consumer. In addition, we offer the consumer a price advantage.

(*) Number of stores planned to be opened by end-2008

Şeyma Öncel Bayıksel
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