#Activism 8. Saga Carrefour - BFM Interview

🚨 🚨🚨 Project X / Carrefour: An Economic Model Under Pressure 🚨🚨🚨

🔎 A Controversial Strategic Shift

Carrefour is accelerating the franchising of its stores to reduce capital exposure. Currently, 5,870 out of 6,468 stores in France are franchised, including 100% of the proximity network and Cash & Carry locations.

However, this transformation is creating tensions: The Carrefour Franchisees Association (AFC), which already represents 260 stores, annonced on Friday 07.03 the launch of an alternative supply sources named Project X, threatening the balance of the model.

📉 Deterioration of Financial Fundamentals

➡️ Increased Dependence on Franchisees: Carrefour enforces a contractual loyalty rate of 70-75%, under penalty of a 5% fine. A competing alternative is now disrupting this monopoly.

➡️ Growing Legal Risks: Low provisions (€0.70M per store), while ongoing arbitration cases reach up to €15M. The state appears to be siding with franchisees.

➡️ Impact on Supply Chain and Margins: Purchase leakage could cost €150-200M over three years, with an estimated profit reduction of €27-36M.

⚠️ A Domino Effect on Strategic Revenues

Carrefour generates €619M in service revenues from suppliers, directly tied to purchase volumes. If these volumes decline, renegotiating agreements could weaken the group’s profitability.

📊 Whitelight Capital will continue to monitor the evolution of franchisee relations, as their impact on margins will be critical in assessing the future of Carrefour’s business model.

Deep Analysis here: https://lnkd.in/e82EUZ-3