Carrefour has been keeping its entry into Iran low-key, as both the retailer and Tehran's government suspect that the foreign presence may cause some excitement. Tehran is one of the few major cities in the world without an international supermarket chain. Even workers at the supermarket construction site do not know that the building will house the France-based grocery retailer.

The non-publicized operation is seen by diplomats and analysts as an attempt to avoid it attracting political pressure over the country's nuclear programme that could kill the project. United Nations and unilateral US sanctions have hindered big projects in Iran but small ones have been quietly continuing despite logistical difficulties. Carrefour is working through Majid al-Futtaim (MAF), its Dubai-based franchisee, to handle the logistics.

"The shop [in Tehran] will carry the Carrefour brand while MAF will be the licence-holder of this brand," says Hossein Kalkhorani, managing director of Tehran municipality's investment organisation.

Iran's food industry suffers from high distribution costs because individual retailers are in charge of supply and there is no streamlining of the industry. One diplomat says: "Carrefour will revolutionise Iran's food industry." The store should open by mid-March 2009, but some suspect it may be ready before the end of the year. MAF plans to open 20 hypermarkets in Iran in the next 10 years.

It is not clear yet how feasible it will be for Carrefour to maintain supply in the face of financial restrictions on trade with Iran as a result of US sanctions. Chain stores in Iran have struggled with resistance from traditional merchants and the inefficiency of the state-run economy.

"The presence of a foreign brand for the first time will have a positive psychological impact," says analyst Saeed Laylaz, but he casts doubts on Carrefour's chances of success. "Chain stores should be the last phase of economic liberalisation, not the first."