Why Carrefour struggles go beyond GCC, shutting stores across the world

Dubai: Carrefour, once hailed as the pioneer of hypermarkets and a global retail icon, is shrinking faster than many expected.

In Europe, it has retreated from two of its biggest overseas markets. In Asia, its empire has all but collapsed. In the Middle East, the familiar blue-and-red brand has already vanished from several countries, replaced by a home-grown alternative.

The question is no longer whether Carrefour can hold on everywhere. It’s how long its remaining markets, including the UAE, will remain untouched as global exits gather pace.

Europe: Retreat after years of strain

The French retailer’s latest moves in Europe have underlined just how much pressure it faces.

In Italy, Carrefour sold more than 1,100 stores last year to food group NewPrinces after years of mounting losses. Despite valuing the unit at about €1 billion, the business had posted a €67 million operating loss.

Poland is next. Carrefour has put its 800 stores up for sale, after reporting a 3 percent drop in sales in 2024. Analysts say the brand never truly cracked a market dominated by discount players, and after nearly three decades of effort, the business still struggles to turn a profit.

Back home in France, Carrefour remains the country’s largest grocer, but the fight is intense. Rivals like Leclerc continue to eat into market share, while strict government rules on food pricing keep margins under pressure. Even as sales ticked up this year, investors worry about how sustainable the recovery really is.

China: Collapse few predicted

Carrefour’s decline in China has been even more dramatic.

When it entered the market in 1995, it was an instant success. The hypermarket model was new, and for years Chinese families flocked to its aisles. By 2015, sales peaked at RMB38 billion (€5 billion).

But the story turned quickly. By 2021, Carrefour had 205 stores. By late-2024, just four remained.

What went wrong? Analysts point to a weak supply chain — Carrefour relied too heavily on suppliers rather than building its own logistics backbone. It was also late to e-commerce, falling behind competitors like JD.com, Walmart and RT-Mart. And as Chinese shoppers embraced online retail, its large-format hypermarkets became less relevant.

Even the 2019 takeover by Suning, one of China’s biggest retailers, couldn’t stop the slide. Carrefour’s decline in the world’s second-largest economy now looks irreversible.

Middle East: From Carrefour to HyperMax

Closer to home, the retreat has also taken hold.

In the past year, Carrefour outlets in Kuwait, Bahrain, Oman and Jordan have closed. Their sites have been rebranded as HyperMax, a new grocery chain created by Dubai-based Majid Al Futtaim (MAF), Carrefour’s long-time regional partner.

MAF says the shift reflects local demand for affordable, locally sourced products — and shields the business from political boycotts targeting global brands.

In the UAE, though, Carrefour remains deeply entrenched. With hundreds of outlets across malls and communities, the brand still enjoys strong consumer trust. Analysts suggest MAF may pursue a dual strategy: expanding HyperMax in some markets while keeping Carrefour in core ones like the UAE. For now, that balance seems to make sense.

Investor pressure mounts

The bigger challenge for Carrefour lies in investor confidence.

The group’s market value has shrunk to about €9 billion — a fraction of its past size and nowhere near French corporate champion LVMH, which now stands at €231 billion. Shares hit a 32-year low in mid-2024, and the company has become one of the most shorted grocers in Europe.

CEO Alexandre Bompard, in his eighth year at the helm, has tried to reassure investors with asset sales and cost-cutting, but many remain unconvinced. After decades of expansion, Carrefour now looks like a company in retreat.

Will UAE market stay safe?

Even as Carrefour’s UAE operations remain intact, its global exits highlight deeper vulnerabilities. The same pressures that forced closures in Kuwait, Bahrain, Oman and Jordan — intensifying competition, localisation demands, and political sensitivities — are not unique to those markets.

The UAE retail landscape remains one of Carrefour’s strongest footholds, but as Majid Al Futtaim grows HyperMax and Carrefour continues to scale back globally, a key question remain.

Can the UAE remain Carrefour’s safe haven — or will global exits force a pivot here too?