Carrefour says it will open first Indian outlet by November

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French supermarket giant Carrefour said Friday it would open its first wholesale store in India by November, joining other foreign chains aiming to break into the country's vast retail sector.

The world's second-largest retailer hopes the wholesale outlet in New Delhi will pave the way for a string of hypermarkets to serve consumers in the fast-growing economy.

"We plan to open a cash-and-carry store by November," Carrefour spokesman Franck Kenner told AFP in Teekli village in northern Haryana state.

Carrefour, Wal-Mart and others want to sell directly to Indian customers as they hunt new markets.

But India's tight investment rules restrict overseas companies to "back-end" wholesaling -- except for single-brand outlets such as Nokia or Reebok -- to protect local, family-run stores which fear being driven out of business.

"We hope it (the wholesale store) will be the beginning of something larger," Kenner said, referring to his company's desire to serve store customers, rather than only operating cash-and-carry outlets.

He was speaking in a lush agricultural belt where Carrefour is working with farmers to improve old-fashioned farming methods -- boosting yields and cutting wastage -- as it readies for its Indian entry.

Kenner added Carrefour remained "committed" to India with its huge market potential, amid media reports that European and Asian retail players are battling to take over the Southeast Asian assets of the French chain, valued at around a billion dollars.

Kenner said Carrefour is, for the moment, going it alone in the wholesale business unlike US giant Wal-Mart, which teamed up with India's Bharti Airtel mobile group when it launched its Indian wholesale operation last year.

"We are in talks with partners," Kenner said, but declined to reveal any names. The Future Group, India's largest retail chain with outlets such as Big Bazaar, has been most frequently cited as a potential partner for Carrefour.

The Indian government recently threw open the debate on a softening of restrictions on foreign players in the retail sector.

Fears foreign retail giants will consume local businesses are dismissed by experts who say India's 500-billion-dollar-a-year retail market, whose sales are growing by 13 percent annually, has room for all entrants.

"The government is fully conscious that back-end problems are a weakness and this where foreign players can help with their expertise," said Yannick Douville, director of Carrefour's fresh food operations in India.

India's antiquated storage and processing facilities mean at least 30 percent of harvests are wasted, costing 13 billion dollars a year, according to a new report by the Confederation of Indian Industry.

Indian Commerce Minister Anand Sharma spoke out this week in favour of allowing foreign players into the retail sector, saying it would "generate tens of millions of jobs from sorting to processing" and also lead to the development of much-needed infrastructure such as warehouses and cold-storages.

Douville agreed foreign retailers could help cut food waste by working with farmers.

"India's supply chain is so layered with agents -- commission, wholesale -- that it increases the time to market and the wastage," said Douville.

"We at Carrefour are hoping to drastically reduce the losses to maybe five percent by bringing the farmer closer to the retail operation," Douville said.

© 2010 AFP

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