France-based retail giant, Carrefour is again facing a bankruptcy rumor with potential closure in China after a series of store closures in China in 2022, as well as looking at its ‘eery’ past decade of historical exits from Asian countries like Singapore, Thailand and Indonesia, just to name a few.
A representative from Carrefour China has denied the bankruptcy rumor and said that the retailer will continue operating in China market. Chinese consumers noted the empty shelves in some of its stores as a sign of their potential demise from Asia’s largest retail market.
Carrefour entered China in 1995 and expanded quickly, however its profits began to decline as competition increased. In 2019, the French retailer sold 80% of its loss-making China business to Jiangsu-based Suning.Com for Rmb 4.8 billion (US$699 million).
The retail sector in China faces major challenges during the pandemic, and Carrefour was busy transforming its supply chain model to fit in to consumer demands. Carrefour had 151 stores in China as of September 2022, after the closure of 54 stores during the same period. Suning shut down some regional stores to improve Carrefour China’s economies of scale.
Carrefour China’s net loss widened almost 14% to Rmb 662 million (US$97.7 million) in the first half of 2022 from a year earlier, while revenue fell 25% to Rmb 8.9 billion (US$1.32 billion).