Global Update

Auchan plans store revamp

French retailer Auchan has opened a new hypermarket close to Disneyland Europe, east of Paris, that will be the model for all its future store conversions. The new 170,000-square-foot outlet employs many of the solution selling concepts that rival Carrefour has started to adopt in its French hypermarkets. For example, all baby products are grouped together in a section called "Look after yourself better," while bathroom products are stocked in a section called "Look after your house better." Among other new features, the new store will allow customers to test facial creams and drink coffee within the main sales area. Most of these concepts will be extended to Auchan's 116 other French hypermarkets by 2004. The new store is likely to be the last large hypermarket to open in France for several years because of government restrictions.

Tesco recoups investment in retail exchange

U.K. retailer Tesco has almost recouped its $2 million investment in WorldWide Retail Exchange (WWRE), the online retail marketplace. Barry Knichel, supply-chain divisional director at Tesco and a member of WWRE's operating committee, says the supermarket chain has calculated its savings by comparing sourcing costs using WWRE with estimates of traditional negotiations with suppliers. He admits, however, that the use of reverse auctions, which enable suppliers to bid against each other, can make it tough to maintain close business relationships.

Norwegian chains merge

The consolidation of the Scandinavian food retail sector accelerated in November when Norwegian retailers Rema 1000 and Narvesen announced their merger. The deal between Rema 1000, a supermarket chain controlled by the Reitan family, and Narvesen, a convenience store chain, has created a company with combined sales of more than $2.16 billion (Nkr 20 billion). Reitan Narvesen, the name of the combined company, will be jointly controlled by the Reitan family (49.2%) and Narvesen's shareholders (47.6%), with the remaining shares controlled by Rema's minority shareholders. Narvesen and Rema 1000 say their merger is designed to strengthen their position as the Scandinavian retail market.



Foreign groups boost Thai investment International retail groups are investing heavily in Thailand to take advantage of the country's economic recovery. Belgium's Delhaize Group, which operates the Food Lion supermarket chain in Thailand, plans to open 30 new stores within the next three years, increasing its number of outlets in the country to 50. The store openings will help Food Lion catch up with Ahold-owned Tops, which plans to have 53 supermarkets in Thailand by the end of next year—up from 40 at present. In the hypermarket sector, French retailer Casino, which bought a 68% stake in Big C Supercenter last year, recently opened its 23rd store in Thailand, and hopes to have 40 stores in the country by 2002.

(For more information about CIES–The Food Business Forum, visitwww.ciesnet.com.)