Alexandre Bompard, who took over as Carrefour’s CEO in July, is trying to overhaul Carrefour’s French hypermarket business as well as expand online retail. Amazon’s purchase of Whole Foods in the United States last year has prompted speculation that the company could be targeting food retail in Europe next.
Bompard plans to invest 2.8 billion euros ($3.4 billion) in digital commerce by 2022, six times its current investment, as Carrefour plays catch-up in online food retail.
Under pressure to increase profits, Bompard also announced cost savings of 2 billion euros by 2020, including a voluntary redundancy plan for 2,400 employees at its French head office and plans to sell or close 273 underperforming stores Carrefour bought from Spanish retailer Dia in 2014.
Other big European retailers are also cutting jobs. Britain’s supermarket group Tesco said on Monday it would cut a net 800 jobs from its UK business to simplify operations and cut costs.
The group, the world’s second largest retailer with more than 380,000 employees, is targeting 5 billion euros in sales in food e-commerce by 2022 – an amount that would be six times greater than at present, which would represent a 20 percent market share in France.
Bompard also announced a potential deal with Tencent and local retailer Yonghui to take a stake in Carrefour China. Carrefour would still be the largest shareholder.
Bompard’s plans followed Carrefour’s warning last week that its 2017 operating profit could fall by 15 percent amid weak sales, marking its second profit warning in six months.