Carrefour battles Wal Mart in South America

Carrefour's Chief Executive, Jose Luis Duran, said that his group is "watching very carefully the market", specifying that Carrefour will take part in the process of consolidation in Brazil and South America, intensifying the battle with Wal Mart.

Carrefour, founded in 1957, second only to Wal Mart in the international retail business, Carrefour acquired the discount hypermarket chain Atacadão in April 2007. With 444 stores and more than 48,000 employees, Carrefour is a major participant in the Brazilian economy. Carrefour has had a presence since 1975 in Brazil.

Wal-Mart entered Brazil in 1995. A price war immediately ensued between Wal-Mart and the French chain quickly ensued. Carrefour built a hypermarket right next to Wal-Mart's first São Paulo Supercenter. The store sells two times what Wal-Mart does, according to a former Carrefour executive.

In 2004, Wal-Mart bought 118 Bompreço stores from Ahold for US$300 million. They are in the poorer northeastern part of the country, so the acquisition did little to strengthen Wal-Mart's foothold in wealthier southern Brazil. In 2005, Wal-Mart paid US$764 million for Portuguese retailer Sonae’s 140 supermarkets, hypermarkets and wholesale units in the southern Brazilian, threatening Carrefour’s position. In 2006, Wal Mart Brazil had impressive financial results.

The recent Atacadão acquisition has pushed Carrefour back into first place, Casino into second place, and Wal-Mart remains in third. Wal-Mart intends to continue to pursue its multi-pronged growth strategy throughout 2007 with a view to eroding further the dominance of the competition.