Carrefour's failure in Singapore
NUS Business School
MNO3303 Organizational Effectiveness
Individual Assignment, March 2014
By Ho Sue Yuin
Case Study on Carrefour’s failure in Singapore
1.0
Introduction
In November 2012, France-based Carrefour SA (Carrefour), the second largest retailer in the world and the pioneer of the hypermarket concept in Singapore, closed down its two megastores in Suntec and Plaza Singapura, marking Carrefour's exit from the Singapore retail market. According to the company’s statement, Carrefour
Singapore had decided to quit, as “expansion and growth perspectives do not allow reaching a leadership position in the medium and long term”.
Ho Sue Yuin A0088564N
2.0
Complications faced by Carrefour in Singapore
The main problems encountered by Carrefour while expanding its market in
Singapore include low growth in sales, ambiguous consumer preference, limited space and loss of focus due to handling of main operations in Europe.
2.1
Tough competition in a saturated market
A hypermarket is a one-stop shop that combines a supermarket and department store and hence offers a wide range of products. As a pioneer of the hypermarkets in
Singapore, Carrefour stores initially managed to attract customers who preferred convenience due to busy work schedules in this rapidly growing country.
Singaporeans were excited to shop at a place that offered both groceries and general merchandise such as electronics and furniture under one roof.
However, competitors from both local and neighboring regions started to emerge fiercely and began to overtake Carrefour. Giant, originally from Malaysia, opened its first store in Singapore in 2000 and currently has nine outlets; NTUC FairPrice, which entered the market in 2006 with strong governmental support, has five stores now.
Besides, grocery retailers like Cold Storage and Shop and Save; electronic retailers like Courts and Best Denki gave Carrefour a tough time gaining market share.
MNO3303 Organizational Effectiveness
Individual Assignment, March 2014
By Ho Sue Yuin
Case Study on Carrefour’s failure in Singapore
1.0
Introduction
In November 2012, France-based Carrefour SA (Carrefour), the second largest retailer in the world and the pioneer of the hypermarket concept in Singapore, closed down its two megastores in Suntec and Plaza Singapura, marking Carrefour's exit from the Singapore retail market. According to the company’s statement, Carrefour
Singapore had decided to quit, as “expansion and growth perspectives do not allow reaching a leadership position in the medium and long term”.
Ho Sue Yuin A0088564N
2.0
Complications faced by Carrefour in Singapore
The main problems encountered by Carrefour while expanding its market in
Singapore include low growth in sales, ambiguous consumer preference, limited space and loss of focus due to handling of main operations in Europe.
2.1
Tough competition in a saturated market
A hypermarket is a one-stop shop that combines a supermarket and department store and hence offers a wide range of products. As a pioneer of the hypermarkets in
Singapore, Carrefour stores initially managed to attract customers who preferred convenience due to busy work schedules in this rapidly growing country.
Singaporeans were excited to shop at a place that offered both groceries and general merchandise such as electronics and furniture under one roof.
However, competitors from both local and neighboring regions started to emerge fiercely and began to overtake Carrefour. Giant, originally from Malaysia, opened its first store in Singapore in 2000 and currently has nine outlets; NTUC FairPrice, which entered the market in 2006 with strong governmental support, has five stores now.
Besides, grocery retailers like Cold Storage and Shop and Save; electronic retailers like Courts and Best Denki gave Carrefour a tough time gaining market share.
References: 1. Ng, K. L. (2012). The Sunday Times: Carrefour leaves Singapore, Suntec City & Plaza Sing stores to shut 2. Ng. K. L. (2012). The Straits Times: French Supermarket Carrefour to Exit Singapore 3. Krishnan, T. (2012). The Business Times: Why Carrefour failed in Singapore. 4. Colla, E. & Dupuis, M. (2010). Research and managerial issues on global retail 5. Loeb, W. (2013). Forbes: Successful Global Growers: What We Can Learn From Walmart, Carrefour, Tesco, Metro 6. The Economist. (2013). Up the right aisle – George Plassat is reviving the world’s second-biggest retailer 7. The Economist. (2011). The secret of IKEA’s success. Available online at http://www.economist.com/node/18229400, last accessed 20th March 2014.