Chain Finds Smart Way to Grow Business

By Vasantha Ganesan

MALAYSIA’S smallest hypermarket in terms of outlets, Carrefour, appears to have skirted rules by moving into the convenience store business.

It is a clever move because the stores, which are not allowed for foreigners under current rules, will be run under the franchise concept.

By doing so, the business falls under a different set of rules under the Ministry of Entrepreneur and Cooperative Development. Currently, hypermarkets are regulated by the Ministry of Domestic Trade and Consumer Affairs.

Carrefour officials have declined to comment.

Late last month, the French retailer opened a convenience store under the brand, Carrefour Express, in Wangsa Maju, Kuala Lumpur. More stores will be opened, one source told Business Times.

This means that the franchise concept may help Carrefour gain a bigger slice of the RM64 billion retail market in Malaysia.

Although it was the first to enter Malaysia in 1994, Carrefour has the least number of outlets at 13. It trails Hong Kong’s Dairy Farm, which has 28 Giant hypermarkets, and the UK’s Tesco, which has 14 stores.

Dairy Farm also operates Giant and Cold Storage supermarkets/ superstores and the Guardian health and beauty/pharmacy chain.

Tesco, meanwhile, also runs six Tesco Extras which cater for both retail and wholesale buyers.

Based on a search at the Companies Commission of Malaysia, Carrefour Express is operated by a company registered last September, called Agenda Unggul Sdn Bhd.

It was set up to carry out general trading, construction and manufacturing.

It has RM100,000 authorised capital and has issued two shares of RM1 each. The two shares are held by one Rofiati Ahmad and a Mohammad Shariffudin Mohamed Soltan.

The company directors are Datuk Ibrahim Ahmad and Raihanah Yahaya. Both were appointed in February this year.

Carrefour in Malaysia is operated by Magnificient Diagraph Sdn Bhd, which is 30 per cent owned by Negri Sembilan Royalty- controlled Syarikat Pesaka Antah.

Carrefour is the second largest retail chain in the world in terms of revenue, after the US’ Walmart.

According to the Carrefour group website, it currently operates four main grocery store formats: hypermarkets, supermarkets, hard discount and convenience stores.

It has more than 15,000 stores, either company-operated or franchises. As at December 31 2007, there were 4,800 convenience stores worldwide, 95 per cent of which are operated under franchise agreements.

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