All Carrefour stores in Beijing have been closed. On September 7, Ran Ciyuan discovered at Carrefour Shuangjing and Siyuanqiao stores in Beijing that yellow fences had been put up in both stores and the shelves were empty. There were several "scalpers" hanging around the door of the store. Whenever someone approached, they would come up and ask "Do you want to recycle the Carrefour shopping card?"

On September 14, Beijing Business Daily also reported that the Siyuanqiao store, the only remaining operating Carrefour store in Beijing, was closed recently. Caixin also reported that recently, Carrefour’s last store in Beijing, the Siyuanqiao store, officially closed after being out of stock for several weeks.

"The Shuangjing store will be closed around August 25." On September 7, a "scalper" who collected cards at the entrance of Carrefour Shuangjing store in Beijing told Ranciyuan. According to the observation of a clerk at a barber shop near the store, Shuangjing Carrefour was particularly depressed about two months ago.

Regarding whether the last two Carrefour stores in Beijing, Beijing Carrefour Shuangjing Store and Siyuanqiao Store, have been confirmed to be closed, and whether there are plans to reopen in the future, Ran Ciyuan has asked Suning to find out, but as of press time, no substantive reply has been obtained.


Picture/Carrefour Siyuanqiao Store

Source/Photographed by Ranciyuan at Siyuan Bridge in Beijing on September 7, 2023

Outside Beijing, the 2023 semi-annual report released by Suning.com (002024.SZ) shows that in the first half of 2023, the number of Carrefour stores in China decreased by 106. As of June 30, 2023, there were only 41 Carrefour stores in China left.

After closing 106 stores in the first half of the year, Carrefour China continued to close stores in the second half of the year. Data show that on July 17, 2023, the Nanhu Carrefour store, the last Carrefour store in Xinjiang, also officially ceased operations; on August 25, the Carrefour Guangzhou Xinshi store posted a closure notice, which also meant that all Carrefour Guangzhou and Shenzhen stores were closed.

On September 14, news came out that some Shanghai citizens reported that they had received a "Retirement Announcement" stating that Carrefour could no longer operate and negotiated a refund. However, the URL provided in the announcement "does not look like a regular website and is suspected to be a fraud." In response, Carrefour also responded that it was a fraud and had reported it to the police.

Behind the facts and rumors, Carrefour China is crumbling.

According to Suning.com's 2023 semi-annual report, among the 106 stores that Carrefour China reduced in the first half of the year, they were located in eight regions including East China, Central China, and South China. In terms of market level, they also covered primary, secondary, and tertiary markets; in terms of square footage, in the first half of 2023, Carrefour China's eight regions including East China, Central China, and South China, as well as primary, secondary, and tertiary markets, all showed a large proportion of year-on-year declines.

Regarding the future of Carrefour, Suning disclosed to Ranciyuan on September 12, "In offline channels, we will explore new store development models; in online channels, Carrefour will seek near-field retail models to promote the development of online operating models such as live broadcasts and communities. In addition to C-end users, we will explore market space for government and enterprise B-end markets and sinking markets, and continue to improve and optimize supply chain construction."

Just from an intuitive perspective, the new model disclosed by Suning, as well as the B-side of government and enterprises, and the sinking market, have yet to see significant progress.

Due to poor management and difficulty in blood transfusion, the answer is not optimistic about whether Carrefour's dozens of remaining stores in China can still persist and how long they can persist.


stuck in quagmire

The crisis has already emerged.

Since December last year, the number of people who have come to inquire about the seller's LeFou shopping card has begun to surge. On September 7, at Carrefour Shuangjing and Siyuanqiao stores in Beijing, a "scalper" engaged in the business of recycling shopping cards told Ranciyuan.

Since the end of last year, or even earlier, Carrefour has been involved in rumors such as "due to rent arrears and being asked to move out by the mall", "unpaid supplier payments", and "unpaid employee wages".

In August this year, the topic "There are no more Carrefour stores in many places" attracted attention on Weibo, mentioning that some Carrefour stores in Wuxi, Shanghai and other places have been closed one after another, and that all Carrefour supermarket stores in Guangzhou and Shenzhen have been closed.

Looking back now, the closure of Carrefour's Chinese stores seems to follow the same path.

First, there was a shortage, and the same products filled the shelves. Ranciyuan saw that a Beijing Carrefour consumer said on the community platform in May this year, "Several rows of Shuangjing Carrefour's containers are filled with chicken essence, several rows are filled with plastic kettles, and several rows are filled with Shaqima."

In August this year, some consumers in Shanghai also said, "When I went to Carrefour in Xuhui, there were only some strange products on the shelves that I had never heard of before, but the prices were ridiculously expensive. After learning more about it, it turned out that it was going to close."

Behind this is Carrefour's quagmire supplier situation in China. Ran Ciyuan saw that many people said, "More than 5 million yuan in payment has not been settled", "There are too many debts, no one is willing to deliver goods to them, and there are still a lot of people who want to sue them for debt collection."

Then the store was withdrawn and closed, leaving employees, suppliers, and consumers with nothing to protect their rights.

In July this year, the topic "Laid-off Carrefour employees did not receive compensation" became a hot search topic.

According to media reports, a former employee of Carrefour China revealed that they had received layoff notices one after another. However, due to tight funds, Carrefour China proposed two plans to let laid-off employees "choose one": one is to pay the compensation in installments, but the full amount can be paid; the other is to discount the compensation at 40% and can be paid in one go. Faced with the solutions offered by their old employers, some laid-off old employees had no choice but to choose labor arbitration to get back their money.

Consumers who cannot solve the problem of shopping card balance are crowding the Internet.

Ranciyuan has seen that Carrefour currently promises a 20% phased processing policy for some shopping card holders. That is, for Carrefour card holders, the balance in the card can be used for shopping at Suning.com stores, but the usage limit is 20% of the current consumption.


Picture/Card refund plan instructions given by Carrefour Siyuanqiao store

Source/Photographed by Ranciyuan at Siyuan Bridge in Beijing on September 7, 2023

Wuxi consumer Xiaoman, who currently has seven Carrefour shopping cards with a balance of about 3,100 yuan, recently visited a Suning.com store.

"There are indeed categories that can be used, such as TVs, refrigerators, water purifiers and other designated products. Carrefour cards can be used at settlement, but only 20% of the deduction is available, and the limit is 2,000 yuan, which means that you can only use a 2,000 yuan card if you buy a product of 10,000 yuan. Small appliances and mobile phones cannot be used," Xiaoman said bluntly.

In order to reduce losses, Xiaoman also consulted about "collecting cards" from different channels, but the prices were all very low. "The higher ones are charged at 3.3 or 40% off, and some said they can only be charged at 10% off. Even those who accept cards are disgusted." Xiaoman said, "In order not to lose money, there is a high probability that I will choose to sell at a low price in the future."

The 20% usage limit is not applicable to all Carrefour shopping cards.

A "scalper" who is engaged in the business of recycling shopping cards told Ranciyuan, "Cards starting with 84 can now be recycled at a 30% discount because they can be consumed at Suning. Cards starting with 65 can only be recycled at 20% off, while cards starting with 23 can only be discounted at 10%. Cards starting with 23 have too many restrictions. We are just taking a gamble. Maybe this card will be used for other purposes in the future."

In desperation, some consumers chose to defend their rights through litigation and "hardened" Carrefour.

"When I went shopping in January this year, there were many restrictions. In June, I applied for a refund again, but the person in charge of Carrefour said that I could not refund and asked me to sue." Chenchen, a Carrefour cardholder in Beijing, said to Ranciyuan, "So I filed a lawsuit with the People's Court where I am located, but the feedback I received was that any case involving Carrefour will fall under the jurisdiction of the Nanjing Intermediate People's Court because it is a centralized jurisdiction case."

Chenchen's case against Carrefour has been filed. There has been no court hearing or verdict yet. Now Chenchen is also waiting for the next step.

Suppliers are also on the road to safeguarding their rights. On September 18, Ranciyuan saw on the People's Court Announcement Website that there were 6 announcements involving "Carrefour" in September alone, 5 of which were directed at "Carrefour (Shanghai) Supply Chain Management Co., Ltd."

Regarding the closure of some Carrefour stores in China, Suning responded to Ranciyuan by saying that Carrefour is currently undergoing business adjustment and optimization, and some city stores have stopped operating. Active solutions are being provided to cardholders, such as being able to use them at nearby Suning.com stores. In addition, special personnel will be arranged to handle the special requirements of some cardholders.

However, judging from the current situation and the past, it is not easy to properly deal with a series of problems arising from the closure of Carrefour China stores.


The crisis continues

On September 14, the day the news came out that all Carrefour stores in Beijing, China were closed, there were also rumors that "Shanghai Carrefour is unable to continue operations and is negotiating for refunds."

This news was confirmed to be a scam. However, a Caixin report on September 14 also pointed out that “the only five remaining stores in Shanghai have very few goods left on the shelves, and many members are unable to return their cards and have no goods to buy.”

At about the same time, on September 9, Carrefour Chengdu Wenjiang store officially closed. The closure announcement showed that as of this time, only Carrefour Shuangqiaozi store in Chengdu was open normally. On the same day, news posted by the Weibo account "Bingcheng.com" showed that the People's Court of Daowai District, Harbin City, Heilongjiang Province issued a seizure announcement to seize the property of Harbin Carrefour Supermarket Co., Ltd. (Lesong Store).

In addition, judging from the store closures of Carrefour China in the first half of the year, urban stores regardless of region or level are being closed. It is unknown how long Carrefour's dozens of stores still in operation can sustain it.

From a high-profile retail giant to a "burden" that people are eager to get rid of, how did Carrefour China get to this point? One of the answers may be that Carrefour China has always been "slow" in its transformation.

In 1995, the global retail giant Carrefour entered the Chinese market, which also opened up memories of large supermarkets for most Chinese consumers. "I used to go there often when I was a child." "In 1999, I went to the Shanghai Carrefour Wuning Road store for the first time. (I felt) novel and unprecedentedly big."

However, under the general trend of the Internet and e-commerce, Carrefour lags behind others, "laying the groundwork" for today's ending.


Picture/Carrefour Shuangjing Store

Source/Photographed by Ran Ciyuan in Shuangjing, Beijing on September 7, 2023

Around 2010, the sudden rise of e-commerce brought about earth-shaking changes to China's retail market. However, when competitors chose to embrace and transform, Carrefour missed out on the first wave of dividends.

In 2012, Tang Jianian, who was appointed CEO of Carrefour Asia and CEO of China, even "ignored" the impact of e-commerce at a media appreciation meeting, saying, "Just build your own hypermarket, and e-commerce is not a concern."

While Carrefour said that "e-commerce is nothing to be afraid of," its competitors are embracing e-commerce. In 2011, Wal-Mart began financing negotiations with JD.com, took a stake in Yihaodian, and explored e-commerce, and directly established its e-commerce China headquarters in Shanghai that year. In 2013, RT-Mart also launched its self-operated B2C e-commerce platform Feiniu.com, starting the exploration of "Internet + retail".

It was not until 2015 that Carrefour began to realize the importance of the Internet and e-commerce, but it was too late.

Subsequently, in 2019, Carrefour's China business came under Suning's control. In the past, this "combination" made the market full of expectations. After the transaction was completed, Suning once stated that "by exporting its smart retail scene shaping capabilities, it will conduct a comprehensive digital transformation of Carrefour stores and build a supermarket consumption scene that integrates online and offline."

I just didn't expect that the "honeymoon period" was not long, and Carrefour China was dragging down Suning. Financial report data shows that from 2019 to 2022, Carrefour China's net losses were 304 million yuan, 795 million yuan, 3.337 billion yuan, and 2.832 billion yuan respectively.

Over the years, Carrefour has not stopped tossing. From the early years of e-commerce and small convenience stores, to testing the waters of "membership-based" supermarkets, and then reaffirming its positioning as a "near-field retail service provider" at the beginning of this year, Carrefour China has been looking for the possibility of transformation in the cracks.

In today's busy membership store scene, Carrefour China has yet to make a name for itself. In 2021, Carrefour joined the "member store" trend. In October of that year, Carrefour's first member store in China opened. But the first store encountered "Waterloo" when it opened. Then in May 2023, the first Carrefour member store closed, and it only took about 1 year and 6 months from opening to closing.

Carrefour has tried hard over the years, but the results have been unsatisfactory.


Where is Dashangchao going?

To some extent, the future of Carrefour China is pessimistic.

At the 2022 Annual Shareholders Meeting held in June this year, Ren Jun, the newly appointed chairman and president of Suning.com, mentioned the future of Carrefour and said, "Retail formats like Carrefour are evolving, and China's hypermarkets have encountered similar problems. Looking at the overall situation, Suning will not continue to expand investment and open new stores on this track. On the contrary, we will further shrink and stop losses."

As Ren Jun said, Carrefour is not the only one that is stuck in the quagmire. In 2023, traditional supermarkets will be in the quagmire of continued contraction. Carrefour's difficulties are just a prominent example of the end of the "hypermarket" era. Behind this is the fact that the entire traditional supermarket industry is being pressed by new business formats and new models.

In the Weibo topic square "There is no more Carrefour in Guangzhou and Shenzhen cities", some consumers said, "The big supermarkets that I loved to visit in the past have slowly closed down."

In addition to Carrefour China, another global retail giant, Walmart, is also closing stores in China. On September 12, a Weibo netizen said, "Changchun Walmart's Chongqing Road store will cease operations from the 15th, and the number of brands in supermarkets in the provincial capital city will gradually decrease."

Data shows that after entering 2023, Walmart's stores in China will continue to close. For example, the Walmart store on Jianguo Road in Beijing will cease operations on March 7, the Yanta Road store in Xi'an will cease operations on March 14, and the Lushan Road store in Xunyang District, Jiujiang City and the Beihai Walmart store in Guangxi will be closed on February 28...

Looking at the entire supermarket industry, according to incomplete statistics from Yilan Commercial, at least 692 supermarkets in the convenience store supermarket industry have closed in the first half of 2023, covering 22 supermarket brands, including 106 Carrefour, 131 Lianhua Supermarkets, 66 Zhongbai Group, 65 Better Life, etc.

The function of "hypermarket" has been replaced by fresh food e-commerce companies betting on instant retail. Models such as instant delivery, one-hour delivery, and community group buying continue to weaken consumers' demand for offline supermarkets. "Internet celebrity supermarkets" represented by Hema, Sam's and Costco have become places where consumers prefer "offline check-in" by virtue of their products and environment. These new business formats have been squeezing the living space of traditional supermarkets represented by Carrefour.

Xiaoman also told Ranciyuan that online shopping platforms such as Dingdong and Meituan are the shopping platforms he usually uses, while offline he prefers to go to supermarkets such as Ole, Liges, Sam's, etc. "Especially those supermarkets that launch limited products, I would rather go shopping offline."

At the bottom of a discussion post on Xiaohongshu about supermarket formats, a consumer mentioned, "Carrefour in the old National Exhibition Center is closed, and we strongly urge Hema to move in." Many netizens responded to the proposal, saying it was appropriate, "I sincerely hope that Hema will come to the old National Exhibition Center."


Picture/Carrefour Shuangjing store still has entrance signs

Source/Photographed by Ran Ciyuan in Shuangjing, Beijing on September 7, 2023

Amid the industry's "store closing trend", Carrefour China has never given up, but it seems that it has not found a "handle" that it can rely on.

In February this year, news came out that "Carrefour is about to introduce local state-owned strategic investment." It is reported that Carrefour China announced that it will reach a strategic cooperation agreement with the Yingjiang District Government of Anqing City, Anhui Province to promote in-depth cooperation between the two parties in supply chain, funding, commercial operations and other aspects.

In addition to hoping to introduce external support, Carrefour is also looking for a way out of its business model. In accordance with its proposed positioning as a "near-field retail service provider", Carrefour also hopes to continue transforming into a "small business format" to serve community residents with core family customers within a 3-kilometer radius.

But so far, the outside world has not seen the substantial help these expected plans have for Carrefour.

For enterprises, any new business format or new model requires a process of trial and error. It does not mean that it will be suitable or successful after trying to transform. Moreover, enterprises also need to strengthen their own capabilities before transforming into a new business. "But for Carrefour China, at this stage, it seems that it is difficult to have the hard ability to bear the time and capital costs required for trial and error in the long term." Wen Zhihong, a senior chain industry expert and general manager of Hehong Consulting, said bluntly to Ranciyuan.

"At present, Carrefour China only relies on its own system and business model, and it will be relatively difficult to reverse the situation." Wen Zhihong said, "If a third party can appear in the future and bring financial and other levels of assistance to Carrefour, it will further enhance the hope of successful transformation."

It's just that the general trend is such that it is not easy for Carrefour to "change its destiny".

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