Supermarket chains Carrefour and Real may be looking to sell their operations in Turkey amid slumping sales and growing domestic competition, officials from both companies indicated this week.
French supermarket chain Carrefour SA, the world’s second-largest retailer after Wal-Mart, and German retailer Metro AG, which operates abroad as the supermarket chain Real, both have suggested that their operations in Turkey and other emerging markets were under review, a development that comes amid reports of poor retail performance in the first two quarters of 2012.
Addressing reports of the company’s $39 million loss in the first half of 2012, Carrefour CEO Georges Plassat told the press after an investor presentation on Thursday that the company was likely to pull out of developing countries like Turkey and Indonesia in the near term, while concentrating on established markets in France and Spain
and select emerging markets like Brazil and China.
According to Reuters, Plassat refused to give precise details about the scale of the restructuring, telling the press, “I don’t want to make promises and then fail to meet them.” The retail veteran, who was brought on board Carrefour for his reputation of successfully restructuring troubled French firms, nonetheless suggested that the company may add Turkey to its list of “non-strategic” countries. The grocer recently closed its operations in Greece and plans to close its two stores in Singapore by the end of the year.Plassat argues that the $39 million loss sustained in 2012 was largely attributable to the sale of its stake in Greek grocery chain Marinopoulos and that without the painful liquidation, it would have seen a net gain of $250 million in the first half of 2012. The company head also argued that even the $39 million loss might be seen as a turnaround, given that Carrefour lost $312 million in the first half of 2011.
German-owned Real supermarkets also suggested it was considering downsizing plans this year, with officials from Metro AG — which owns Real — telling Reuters that the company is in talks with Turkish and Eastern European rivals over sale of the chain. Real operates locations in Turkey, Poland, Russia, Romania and Ukraine.
The Turkish press quoted unnamed sources on Friday as saying that several chains may be in talks with Carrefour and Real over a potential acquisition, including Migros Türk, Turkey’s largest retailer, and the Turkish wing of Swiss supermarket chain Migros, and Tesco Kipa, Turkey’s version of the UK-based supermarket chain Tesco, and French chain Auchan.
Turkish media outlet Haberturk quoted Tesco CEO Philip Clarke as saying that the firm might use a buyout of either firm to gain a foothold in İstanbul. It meanwhile quoted Migros General Manager Özgür Tort as suggesting that the company — despite its own sagging profits — may be contemplating its own buyout move. “We are always interested in any kind of opportunity,” he said.