In response to potential competition from Amazon, French retailer Carrefour will invest in eCommerce, seek a partnership with Tencent and put a plan in place to trim its workforce, Reuters reported Tuesday (Jan. 23).
After taking the helm in July 2017, Carrefour chief executive officer Alexandre Bompard is seeking to reinvent the company’s brick-and-mortar hypermarket business and expand its eCommerce operations. Following Amazon’s purchase of Whole Foods last year, Carrefour could face competition from the eCommerce giant if it were to take on the retail food space in Europe.
As the company seeks to bring its digital business up to speed, Bompard plans to invest 2.8 billion euros ($3.4 billion USD) in eCommerce by 2022 — six times Carrefour’s current investment in its web operations
“Carrefour has reached a turning point in its history,” he said. “We have a huge ambition and I am well aware of the magnitude of this challenge.”
Bompard also plans to downsize brick-and-mortar by selling or closing 273 underperforming stores the company acquired from Spanish retailer Dia in 2014.
Grocery retailers like Carrefour could face massive changes following Amazon’s multibillion-dollar acquisition of Whole Food Market. PayPal CEO Dan Schulman said the change was a defining moment for the industry, TheStreet.com reported.
“Until then, most people had understood that the world was moving toward omnichannel, but thought there was a distinction between online and offline,” Schulman said, adding that the deal showcases the blending of the online and offline worlds of retail, with mobile as the preferred method to access all of it.
Amazon has capitalized on the deal through its online AmazonFresh offering, an arm which reported sales were up 35 percent to $135 million in the last four months of 2017, according to the Wall Street Journal. The eCommerce retailer sold an estimated $11 million in Whole Foods’ 365 Everyday Value natural and organic products last year — $1.6 million in its first month of carrying Whole Foods products.