After over a decade, the French supermarket retail chain Carrefour has returned to India with a strategy markedly different from the one it pursued when it first came here. It is now betting that physical stores still have a role to play even as quick commerce reshapes grocery shopping and traditional retailers retain their dominance.
The retailer, which exited India in 2014 after operating five cash-and-carry stores, opened its first store in Noida on Thursday under a new franchise partnership with Dubai-based Apparel Group. It plans to open about 50 stores across the National Capital Region and Uttar Pradesh over the next three to four years, before expanding to other parts of the country.
It has four formats globally that it could potentially deploy in India: hypermarkets, supermarkets, gourmet stores and express stores.
Second innnings
The company said the initial sales have been stronger than expected. The first store, spread across 50,000 square feet and carrying about 50,000 stock-keeping units (SKUs), soft-opened on 14 August. “We’ve been opening about 500 stores every year in the markets we are present in. These are good figures for the store’s early days,” Patrick Lasfargues, director of international partnerships and Nilesh Ved of Carrefour and Apparel Group, said in an interview with Mint.
Ved did not disclose how much Apparel Group will be investing in the country.
The first store launched nearly two years after the two announced their franchise partnership in September 2024. The companies had originally expected to open the first store in summer 2025, but the launch was pushed back by roughly a year as the partners built a local team and searched for a location that met Carrefour’s requirements.
“We needed the franchisee to set up the team locally to find the right location. It’s not easy to find the location. And also to be in a mall, which is complete and operational,” Lasfargues said.
The companies said they preferred to wait rather than rush the first opening. “We’d rather start with the right ingredients instead of going fast because we announced to the market one year to open,” Ved added.
In its first India attempt, Carrefour invested its own equity and operated five stores. At the time, foreign retailers faced significant restrictions on entering the country's consumer-facing multi-brand retail sector, making a local partnership necessary for a broader consumer strategy.
Apparel Group is a fashion and lifestyle retail business based in the United Arab Emirates (UAE) and operates about 85 international brands, including prominent names such as Tommy Hilfiger, Calvin Klein, ALDO, Skechers, Victoria's Secret, and Tim Hortons, among others.
But the retail market landscape has changed tremendously since its first venture here. Organized retail and large supermarkets were widely expected to become the next major growth engine for packaged consumer goods companies about a decade ago. However, even with the expansion of modern trade, supermarkets have not displaced kiranas and general trade stores. More recently, e-commerce and quick commerce have also changed how urban consumers buy groceries, with smaller baskets and multiple deliveries becoming increasingly common.
Quick commerce on the cards
Carrefour said it has taken changes into account, but does not believe they eliminate the need for physical stores. The company wants consumers to experience the store first, then potentially expand into quick commerce as more stores come online. “We want customers to come to the store themselves to look at the assortment, like made-in-India products, discounts and so on,” the executive added.
Quick commerce is also not off the table. The two are expected to discuss an e-commerce and quick-commerce strategy as the store network develops, with a preference for using existing stores as fulfilment points rather than immediately building a network of dark stores. “We don’t want to open quick commerce from day one. We will first test the model,” said Lasfargues.
That is a significant change from Carrefour’s earlier cash-and-carry formats. Lasfargues said it had, in the middle, considered re-entering the wholesale market but decided against it, as the model did not fit the way kirana stores operate.
“In Brazil, we have more than 350 cash-and-carry units. Indian retailers often have direct supply relationships with distributors and manufacturers, while kirana owners do not necessarily travel to cash-and-carry outlets to stock their stores. We have changed our way of thinking,” he added.
Lasfargues added that Carrefour’s global scale as a key advantage in a crowded market. The retailer has around 15,000 stores across 40 countries and global revenues of about $16 billion, according to the executives.
“Private labels are expected to be an important part of the store’s proposition, as are non-food products. The company also wants Indian products developed for Carrefour to eventually find their way into the retailer’s international network,” he said.
The partners are targeting clusters rather than a scattered national rollout. After NCR, including Uttar Pradesh, they are evaluating markets in western and southern India, but want to build 5-10 stores in each market before moving on. “We can’t go and open one and put flags everywhere but have a cluster of stores around us,” Ved said.