Carrefour’s Strategy in Georgia for 2014
Friday, 14 March, 2014

On March 12 ISET hosted a presentation by Jean-Marc Stavroulakis, Country Finance Manager of Carrefour Georgia, and Petr Dlouhy, Merchandise Manager of the Fresh Division of Carrefour. The main points of the presentation were Carrefour’s market strategy to overcome existing socio-economic obstacles to the development of effective value chains in the Georgian agricultural sector for 2014.

Carrefour, one of the largest French hypermarket chains and the second-largest retailer in the world, started operating in Georgia in 2012. The major strategy of the company is to provide high-quality products at lower prices that correspond to local demand. The best strategic suppliers in terms of quality, price, and demand are considered to be the local producers of organic products.

For these reasons, from the very beginning of their operations, Carrefour’s management started intensive cooperation with local farmers. Their main requirement is the guarantee of a continued supply of the same quality of organic products without breaks. At first glance, it should have offered a great opportunity for Georgian farmers to ensure stable demand on their production over the whole year. Despite these great incentives, farmers failed to fulfill their contracts. Their failure had different reasons, such as: the inability to provide local agricultural products during the off-season, the difficulty in contract enforcement, inappropriate quality of the products, etc.

Based on their experience, one of the main problems with the Georgian agricultural sector are: underdeveloped greenhouses and, as a result, the high seasonality of local products; inadequate transportation and packaging; and low-contract enforcement skills. After realizing these problems, Carrefour started helping local farmers to solve their issues by providing consultations, packaging materials, financing, etc. According to the presenters, the progress in the agricultural sector after 2012 has been visible; you can find various local agricultural products in Carrefour. However, the situation in this sector is still far from ideal. Carrefour’s strategy in Georgia for 2014 aims to further develop their relationship with local farmers and to create an effective value chain that will give them the chance to provide consumers high-quality local products at a relatively low price.

Besides their orientation towards local products, it's worth noting that Carrefour employs around one hundred local citizens, it carries out special training courses for its employees and encourages them to provide friendly customer service. Carrefour plans to expand and open branches in different parts of Georgia.