Refurbishing the store estate

In this month’s UK Retail Briefing, we highlight the need for constant renewal of the store network as outlets have to take on the dual function of sales outlet and marketing for online demand.

The trouble is that new formats, however good, are not necessarily enough.


Carrefour has had a chequered history in recent years. It has suffered from a succession of Chief Executives and as many changes of direction as the warring major shareholders tried to assert control. The result is that everyone has lost out.

New stores are not enough

Anyone who saw a Carrefour Planet store was likely to be impressed. It was smart, looked aspirational and was clearly departmentalised. The trouble is that it left customers confused, because it represented a lurch back to a more upmarket positioning – arguably where Carrefour has historically been positioned, but after a similar lurch to a more downmarket positioning one could forgive them for being confused.

Carrefour had made the classic mistake of trying to change its target market, and retailers who do that usually find that they lose a lot of customers before they start to pick up any new ones. Morrisons in the UK has recently gone through a similar process.

Keeping track of the customer base

Carrefour seems to have lost sight of who its customer base really is. So could the same thing be true of Tesco with its new store in Watford? We don’t think so. Tesco is trying to find solutions to the problem of what to do about its hypermarkets in an era when people may want to use them less. Its solution, in part, is to make them more aspirational – the old café is gone and replaced by an upmarket coffee shop and a service restaurant. The clothing section looks like an independent boutique (well, almost) and there is an upmarket bread counter.

But Tesco is not moving upmarket, it is responding to the way its own customers are changing and their present aspirations. In doing so it hopes to make its customers linger in the store for longer.


Leclerc is doing much the same. It used to occupy the “Asda” position in the market with scruffy, price-led stores. It is still very price-competitive, but its stores are cleaner, smarter and have a greater range of aspirational product. It has realised that there is much more to being successful at the lower end of the market than just having low prices. And it has been rewarded with a far better performance. Carrefour’s sales fell in 2011 and were flat in 2012 while Leclerc’s were up 9% in 2011 and 7.5% in 2012.

Customers becoming more demanding

In an internet age, stores are the most powerful marketing tool a retailer has, and like all marketing, they need to kept fresh, lively and relevant. That means that it is more important than ever that retailers are in touch with how their customers are changing and what their aspirations are. Tesco and Leclerc have the confidence that comes with long-term success. Carrefour seems to be floundering.

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