Carrefour Plans to come up with 4-5 Retail Stores in India by end-2010

News Posted - 2010-02-19

Carrefour, the world’s second largest retailer secured four properties in four cities across India and plans to set up 4 to 5 cash-and-carry stores by the end of 2010, two sources with direct knowledge of the matter told Reuters.

The French retail giant has signed for properties averaging about 100,000 square feet each in New Delhi, Bangalore, Chennai and Hyderabad and is in the process of signing up a fifth property in Mumbai, the sources said.

The first outlet is set to be opened in July in New Delhi, where it has signed a 20-year lease with real estate developer Parsvnath Developers for 100,000 square feet of space, other sources with direct knowledge of the matter said.

The company has set up two entities in India, Carrefour WC&C India Pvt Ltd to run cash-and-carry business and Carrefour Master Franchise Company Pvt Ltd for its retail business.

Indian regulations do not allow foreign direct investment in multi-brand retail, although foreign retailers can set up cash-and-carry outlets on their own.
Source: Indianrealtynews 12/5/10

France’s Carrefour Negotiating with Indian Cos for its Indian Retail Venture

French retailer Carrefour (CARR.PA) is in talks with Indian companies for a partnership and expects to start its business in India with cash-and-carry activities, the company told Reuters. The world’s second largest retailer, however, declined to give names of the companies it is negotiating with and also did not confirm whether it was in talks with Future Group, which runs Pantaloon Retail (PART.BO), India’s largest listed retailer.

“Carrefour and some Indian companies have been discussing partnerships but we do not want to comment on any of the company we have been talking to,” Carrefour said in a emailed statement to Reuters. Indian media has speculated on a tie-up between Pantaloon and Carrefour to launch franchise stores in India. Earlier this week, Future Group Chief Executive Kishore Biyani told Reuters that his company was in talks with several overseas retailers but declined to specify whether Carrefour was one of them.

Indian regulations do not allow foreign direct investment by multi-brand retailers although they can come in through franchise agreements with local players. Foreign retailers are allowed to invest up to 51 percent in single-brand retail and 100 percent in cash-and-carry ventures. India’s robust economic growth at more than 7 percent and its burgeoning middle-class with greater spending power are magnets for foreign retailers who are facing declining demand in their home markets.

The Indian retail market is estimated to be worth about $450 billion, of which organized retail with a share of 6 percent is growing at more than 20 percent. The restrictions on foreign investments in retail have left overseas players with no choice but to enter the Indian market with domestic partners, or set up cash and carry ventures. “Carrefour will develop its activities in India with the start of cash & carry activities in 2010,” the company said. The French firm has set up two entities in India - Carrefour WC&C India Pvt Ltd to carry on cash and carry business and Carrefour Master Franchise Company Pvt Ltd for its retail business.

Carrefour, which has been scouting the Indian market for nearly seven years, has been meeting local vendors and suppliers to finalize sourcing arrangements for food and non-food items. The company already sources supplies worth about $2 billion from India, according to industry estimates. Wal-Mart which has a joint venture with Bharti Enterprises has set up its cash-and-carry store in north India while Germany’s Metro AG (MEOG.DE) operates around five cash-and-carry stores in the country.

Source:Indian Realty News & Reuters 19/2/10