Why couldn't Carrefour please the Japanese?

     Carrefour, the French creator of the hypermarket, was voted best European Supermarket in 1999. The brand's hypermarkets, supermarkets and smaller-sized food stores can be found all across France. In the early 90's, the brand started to spread across Europe and the world. Carrefour can now be found in 32 countries across the globe mainly in Europe but also in Latin America and Asia. The giant sized retailer seemed to be a success all over since its creation in 1863. However it has failed to please one particular population.

    During the year 2000, Carrefour announced it's plan to open 13 stores in Japan to continue its expansion strategy across Asia, yet only 8 stores were opened. Furthermore, in 2005 Carrefour signed an agreement with Aeon, its main Japanese competitor, to take over their 8 stores and allowing them to use Carrefour's brand name in Japan. So what happened during those 5 years? Where did the brand go wrong?

    After analysing the case, one of the main problems appears to have been their marketing strategy. Not only did they make a few big mistakes but they obviously completely omitted to study the Japanese. They did not adapt to their culture, their shopping habits or even their physical appearance.

    Let's go on an imaginary tour of Carrefour in the eyes of a Japanese customer.

The first thing upon entering Carrefour stores that shocked the Japanese was the presence of security guards who made them feel uncomfortable. Secondly, an IKEA-styled one way system was installed, forcing customers to go all the way around the shop,which did not go down well with the elderly. The large size of the store in general intimidated them.

However, it wasn't only the size of the store itself the problem but also that of the isles: the shelves were too high and oppressive and the isles were too large making everything seem very far away. Even the shopping trolleys were too big and heavy and hadn't been adapted to the average Japanese.

Certain systems in the store also left the Japanese confused, such as the conveyer belt that they found created “queue jams” and was a lot less efficient than a cashier placing the items directly into shopping bags. They couldn't get their heads around the weighing system in the fruit and vegetable section either. Accustomed to buying fruit individually or pre-packed, the Japanese are used to knowing the price of each product instantly. Concerning the actual products, one in ten of all fish are consumed by Japanese, and the lack of choice in the fish department disappointed customers.

Another phenomenon that made no sense, literally, were the signs referring to the aisles inside the shop being in English. Not only was there a language barrier where the customers were concerned, but even the employees were having trouble. A large majority of the employees in the Japanese Carrefours were non-japanese speaking French which therefore caused a significant communication problem amongst the workforce.

    Contrary to most Europeans who do one big weekly shop, the Japanese are accustomed to doing numerous small shops. One of the reasons for this is that Japanese are very picky and pay extra special attention to the quality of their food, they like products to be as fresh as possible. When news broke out that Carrefour had been caught selling American pork with a Japanese label and then even more so when they were found to be selling old ham, the few customers became fewer. Another problem that the company faced was important turn-over of employees.

    Carrefour learned from the mistakes made in it's first few stores and changed the shop layout and made changes in it's design from the fourth shop onwards. Following the example of other Japanese super markets they made the aisles less wide and the shelves lower. They regrouped into one area the meat, fish and vegetables and created an Organic Area to create a sense of fresh products. They even hired female, therefore less intimidating, security agents.

   The overall failure of Carrefour was brought on by misconception. The incoherence between the image they were trying to portray and the one that the Japanese had of Carrefour. Being a French brand they associated the latter with luxurious, refined sophisticated products and high quality food, whereas Carrefour's goal was to sell at “Everyday low prices”.

   

 

Fortunately for Carrefour this failure, although costly, wasn't of great importance for the group. “Let's be honest, Japan was a short, expensive adventure for us.”, announced chief executive Jose Luis Duran shortly after they sold their Japanese stores to Aeon for over 70 million euros. They are not the first and will not be the last big European brand to fail to seduce the population and succeed in Japan. DB