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Retail

Carrefour Brazil Acquisition Indicates Continuing Fusion Of Retail And Wholesale

By Steve Wynne-Jones
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Carrefour Brazil Acquisition Indicates Continuing Fusion Of Retail And Wholesale

The announcement by Carrefour Brazil that it is to acquire 30 cash and carry stores from Makro, and convert them to the Atacadão format, further underlines the growing fusion of retail and wholesale in the marketplace, a leading analyst has said.

Clive Black of Shore Capital was commencing following the news that Grupo Carrefour Brasil is to purchase the tranche of outlets from Makro Atacadista SA for 1.95 billion reais (around €420 million), and expand its Atacadão across the country, particularly in Rio de Janeiro and the north west of the country.

Atacadão is styled as a 'wholesale hypermarket', blending cash-and-carry characteristics with those of traditional self-serve retail.

'Benefits Of Scale'

"Carrefour expects to bring an notable increase in sales densities and no doubt the benefits of scale and the removal of central overhead duplication," Black said in a briefing note.

"We find the acquisition interesting not only for the consolidation by Carrefour in its No.2 market outside France (the group has a No.1 position in Brazil), but also because it is a further notch in the fusion of retail and wholesale activities by major retailers operating in largely concentrated and quite mature markets across the world."

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Tesco And Booker

Black pointed to the recent merger of Tesco and Booker as a more local example of how retail and wholesale are increasingly joining forces, saying that the partnership offers significant growth opportunities for the retail giant, "through further acquisitions (the Best Food purchase is set to complete in H1 CY2020), organic growth and the intertwining with retail stores, not least through repurposing excess space in Extra hypermarkets".

Tesco isn't alone in seeking to explore wholesaling either, with Morrisons and The Co-operative (the latter through its purchase of Nisa) expanding their wholesale presence.

"We would expect further interweaving in future years in the UK and further afield as supply chains are national food systems mature, supply chains are rationalised, channels fuse and asset utilisation remains to the fore of strategic plans," Black added.

Brazil Focus

In Brazil, rival GPA is also looking to expand its wholesale/cash and carry format, Assaí, after the banner posted double-digit growth in the fourth quarter of its financial year.

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Overall, GPA reported quarterly gross sales of R$ 16.5 billion (+8.4%) in the fourth quarter.

Carrefour opened 20 Atacadão stores last year, with eight opening in the final quarter of the year alone.

© 2020 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine.

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