Bernard, Daniel 1946–
Chief executive officer and chairman, Carrefour
Born: 1946, in France.
Education: École des Hautes Études Commerciales.
Career: Director of hypermarket chains Mammouth and Delta; Metro, 1975–1981, various positions; 1981–1992, managing director of Metro France; Carrefour, 1992–1998, CEO; 1998–, chairman and CEO.
Awards: Most Influential People in Trade, World Trade Magazine, 2000; Global Corporate Achievement Award, Economist Intelligence Unit, 2002.
Address: Carrefour, 6, avenue Raymond Poincaré, Paris 75771 France; http://www.carrefour.com.
■ Daniel Bernard was the dynamic leader of Carrefour, the French general-merchandise chain and grocery retailer that was the second largest such company in the world, behind Wal-Mart. The group operated hypermarkets (sprawling stores with broad varieties of products and services), supermarkets, "hard discounters" (small specialty stores), convenience stores, cash-and-carry wholesale operations, and food services. The first three of the aforementioned outlets were Carrefour's primary focus and were prevalent in Asia, Latin America, and Europe. Carrefour invented the superstore in the 1970s and had become a rival to Wal-Mart in many regions of the world by the beginning of the 21st century.
A GROCER WITH A GLOBAL REACH
Daniel Bernard quickly climbed the retail and merchandise industry ladder to run the world's number-two discount chain and France's number-one grocery and retail chain. Bernard joined Carrefour in 1992 as chief executive officer and by 2004 had amassed 27 years of retail experience. Before arriving at Carrefour, Bernard had headed the German food retailer
Metro, a large French retailer with a presence in six other countries, for 10 years. In his posts at both companies, Bernard's drive to expand into foreign markets was relentless and ongoing and central to his profit strategy.
Bernard cultivated Carrefour's corporate image into that of a leading merchandiser, particularly in fresh food, and Carrefour developed into an omnipresent standard across Europe. The company advanced to that point under the strong leadership of Daniel Bernard. Called "bright, effusive, confident, sophisticated, and well spoken" by a commentator for MMR (March 10, 2003), Bernard transformed Carrefour from "a French retailer with stores in other countries to the French-based retail company that happens to be the premier global retailer. His vision, more than any other ingredient, is responsible for Carrefour's astonishing metamorphosis, in one decade, into a world-class retailing power" (March 10, 2003).
BusinessWeek called Bernard "a low-key" CEO (June 11, 2001). He listened carefully to his audiences, both within and outside the company. He was determined to expand the company's retail storefront presence around the world and, as a result, its market share. His attention to pleasing customers manifested itself in his ongoing market studies and catchy promotions. Under Bernard, Carrefour garnered a reputation for making the most of clever advertising, displays, and promotions.
Bernard constantly tried to modernize the hypermarket and tailor it to consumer needs and convenience. His zeal for improvement was evident in the company's top-secret, two-year test market in a Paris warehouse. This full-size mock store, stocked with plastic foods, tested different product arrangements and store designs on consumers.
CARREFOUR HAD THE IDEA FIRST
The first retail giant in Europe, Carrefour was by 2004 France's largest and the world's second-largest such company, at a quarter of the size of Wal-Mart. Carrefour was known as the inventor of the superstore and the hypermarket. Its stores were especially visible to the general consumer; they were situated outside town centers and known as "crossroads" of products, from groceries to garden supplies. Additional services included eyeglass repair, travel and rental-car agencies, and mobile-phone service.
Carrefour was active in all types of retail distribution but specialized in food sales. Its stores offered competitive prices and variety in products and brands. The company, a marketing pioneer in the "consumer staples" industry, opened the world's first hypermarket in 1963. The company was known worldwide for its discount Ed markets and Picard frozen foods.
STRATEGY: TAKING ON THE WORLD
Carrefour operated in Latin America beginning in 1975 and opened new purchasing centers and supermarkets in China through the early 2000s. Bernard was instrumental in expanding the company outside its traditional base in France and Spain. Referring to Carrefour's expansion into regions avoided by Wal-Mart, Bernard told BusinessWeek, "We are pioneers" (June 12, 2000). At the end of the 1990s Carrefour had expanded through a major merger at a time when Europe's common currency created the trends of increased competition and industry consolidation.
Part of Bernard's strategy was to target areas of the world where Wal-Mart lagged. Carrefour had particular strengths in merchandising and international sales and marketing. Bernard sustained business growth through mergers and joint acquisitions; he built and converted existing stores and shaped them according to his standards of the hypermarket concept. Discounts and promotions lured customers to new stores.
Bernard was skilled at successfully assessing and moving into international markets. He devoted at least a year to the study of a target market before moving forward with development plans. His attention to local needs ensured smooth transitions and quick customer interest in new stores. Part of his strategy was to tailor Carrefour's retailing to local markets and choose the most appropriate formats, be they supermarkets, hypermarkets, or discount stores. He undertook an aggressive expansion into emerging markets such as China, Poland, and Brazil.
TURNING POINT: THE PROMODÈS ACQUISITION
Bernard's $17 billion friendly acquisition of the French Promodès Group in 1999 solidified Carrefour's national position as the largest retailer and made the company a formidable opponent to Wal-Mart in Latin America and Asia. The acquisition added an effective inventory and distribution system as well as an additional string of stores with a concentration in Spain. Bernard initiated the acquisition to preempt Wal-Mart's doing the same, particularly in light of its already aggressive moves into Europe. The acquisition created a behemoth with a combined $50 billion in annual sales, nine thousand stores, and 240,000 employees in 26 countries and was called by Time magazine a "marriage of convenience" to ward off Wal-Mart (September 13, 1999).
Despite the sound reasoning behind the acquisition, the consequent transition had its rough moments. In 1999 the company began losing out to competitors as its expansion and absorption of hundreds of small stores worldwide became unwieldy. After the merger Carrefour slashed prices on toys, clothing, and food to increase sales. The end of 2000 and beginning of 2001 was another tough period for the company, due to the general economic downturn in Europe. Critics blamed Bernard in part for Carrefour's problems; in spite of his reputation for putting customers first, BusinessWeek accused him of forgetting "retailing's Rule No. 1: Know your customer" (June 11, 2001). The publication noted that Bernard turned off many longtime Promodès customers through his remodeling of the stores and product lines. Carrefour's market share decreased from 18.1 to 17.4 percent, with the stock price dropping 30 percent from its 1999 high. Carrefour was forced to continue to rely on Europe for the majority of its sales—85 percent in 1999.
REINVENTION THROUGH EXPANSION
Bernard eventually put the company back on track, slashing prices in the domestic market and driving into more foreign markets because the market in Western Europe had reached the saturation point. He redirected the retailer after confronting economic problems in Brazil and Argentina in 1999 and the costly logistics of reinventing its added Promodès stores worldwide.
Carrefour's operations profits reached $270 million in 2000, by which time BusinessWeek placed the company in "Wal-Mart's rear-view mirror" (June 12, 2000). Sales totaled $70 billion in 2001; by that time, however, the merged group's retail sales had begun to decline in France, quickening Bernard's enthusiasm for global expansion.
Under Bernard's leadership Carrefour overtook Wal-Mart as the largest retailer in Brazil and competed successfully against Wal-Mart in Argentina. Carrefour had an especially strong presence in the latter country, where the brand name was both common and popular. Bernard proved apt in studying local Argentine customs and tastes and with its localized products managed to appeal to customers far more than did Wal-Mart. Carrefour's success there and in Brazil, Korea, and Mexico made the company a strong rival on the global scene. Bernard also expanded rapidly in Central Europe in 1999, where the market was not yet saturated, as it was in Western Europe.
Elsewhere Bernard invested $800 million in South Korean operations. Bernard told South Korea's commerce minister Yoon Jin Sik that he would commit $200 million a year to operations in the Asian nation from 2004 to 2007. Carrefour had first entered the South Korean market in 1996 with the opening of two dozen retail stores—the company's largest investment in any Asian country.
After several years of careful study of Japan's economic downturn, Bernard made a "concerted push" into the Japanese market in 1999, according to the Wall Street Journal (June 10, 1999). Bernard had concluded that the country's slump would provide an opportunity to move in with hypermarkets at a time when consumer attitudes were changing. He told the Journal that "greater openness to foreign brands and products made a place for hypermarkets that offer good value" (June 10, 1999). This move evidenced Bernard's confidence in targeting local markets and analyzing consumer attitudes in foreign countries as well as in his own.
COMMITMENT TO A TIME-TESTED FORMAT
Bernard's commitment to the hypermarket format and global corporate reach connected local retailers to larger economic trends and businesses. His experience in Argentina, where the French company became the commonplace Argentine grocery store, was an example. At the CIES World Food Business Summit in Barcelona, Bernard emphasized that globalization brought more products to more people, presenting consumers with choices they had never had before. Bernard typically closed acquired stores and then simply reopened them under the Carrefour name, emphasizing the use of local resources. Carrefour purchased many of its products locally—rather than exclusively introducing unknown foreign brands—trained local managers rather than importing its own, and used local channels of distribution.
Bernard invested $2.7 billion in 2002 to open new stores, refurbish others, and expand in Europe and Asia. He was optimistic about the expansion, believing that consumer demand would continue to justify the growth. He planned over four hundred store openings a year, including 40 hypermarkets, one hundred supermarkets, and three hundred discount stores. Rather than struggle with already saturated markets in North America and Europe, Bernard looked to countries and regions where supermarket retailers were few, in places that needed variety and high-quality products at affordable prices.
The Wall Street Journal complimented Carrefour's "international track record—the envy of other retailers now struggling belatedly to go global" (June 10, 1999). When asked if he had any plans to merge with Wal-Mart, he replied, "We have a lot of respect for the people at Wal-Mart. But we have different identities" (June 10, 1999).
By 2004 Carrefour's hypermarkets had begun to lose ground to smaller discount stores. In response Bernard was not afraid to challenge the traditional French manner of grocery shopping; Bernard commanded the acquisition of Comptoirs Modernes, a chain of 550 supermarkets in France and Spain.
Bernard strove to stick with a global branding strategy, stepping outside of his native France to create a brand recognizable not only throughout Europe but across the world, from Latin American to Asia. While under this strategy Carrefour faced temporary setbacks, as some customers were lost in the interim, the company was able to later cut prices to win them back.
The company's profits rose 17.9 percent from the second half of 2002 to reach $514 million in 2003. In that year one-fourth of Carrefour's hypermarket openings worldwide were in China, raising the number of stores in that country to around 50—including a $16 million venture in Shanghai. China, as an emerging market expected to someday be the largest in the world, was the ideal place for Bernard to focus his attention.
Bernard's efforts through the difficult periods paid off. The company was ranked 33rd on BusinessWeek 's list of the 50 best companies in Europe in 2003. By 2004 Carrefour operated 9,600 stores worldwide under a couple dozen names in 30 countries in Europe, Latin America, and Asia. More than half of its retail sales were reaped in France. The company was Europe's number-one retailer through 2004 and continued to present Wal-Mart with strong competition.
Daniel Bernard's success as the CEO of the world's second-largest retailer was based on his broad range of skills. He cultivated a studied understanding of local tastes; his sharp sense of timing enabled him to move into markets at the right moments—particularly before the American giant Wal-Mart attained a foothold. Bernard knew that well before a store opened, customer needs and tastes had to be investigated and tested. Then, Bernard knew that when the store was up and running, Carrefour would have to constantly woo and amaze consumers. Finally, Bernard knew he would have to always reinvent the wheel and try different approaches. He consistently incorporated all of the above factors into his sales efforts and kept his finger on the economic pulse in every store and in every region of the world in which Carrefour operated.
See also entry on Carrefour SA in International Directory of Company Histories.
sources for further information
Bernard, Ariane, "Profit for Retailer," New York Times, August 29, 2003.
"Carrefour Has Many Managers; It Has Only One Leader," MMR, March 10, 2003, p. 20.
"Carrefour Profit Rises," New York Times, August 29, 2002.
Cowell, Alan, "French Chains Plan to Merge into a Giant," New York Times, August 31, 1999.
"Daniel Bernard," BusinessWeek, June 12, 2001, p. 82.
Kapner, Suzanne, "Two Big European Retailers Contrast in Strategy and Profit," New York Times, August 31, 2001.
Krauss, Clifford, "Selling in Argentina (as translated from the French)," New York Times, December 5, 1999.
Labi, Aisha, "A Gallic Grocery Giant," Time, September 13, 1999, http://www.time.com/time/magazine/article/subscriber/0,10987,1107990913-30978,00.html.
"A Look at the Leaders," BusinessWeek Online, July 28, 2003, http://www.businessweek.com/@@HbAVSIUQHGzZsRYA/magazine/content/03_30/b3843711.htm.
Matlack, Carole, and Adeline Bonnet, "What's Shackling France's Big Chains," BusinessWeek Online, May 17, 2004, http://www.businessweek.com/@@HbAVSIUQHGzZsRYA/magazine/content/04_20/b3883073_mz054.htm.
Orr, Deborah, "Shoplifters!" Forbes, March 5, 2001, http://www.forbes.com/forbes/2001/0305/097.html.
Reed, Stanley, "Commentary: A Year They'd Like to Forget," BusinessWeek, June 11, 2001.
"Retailer Plans Expansion," New York Times, December 1, 2001.
"Talks in France May Bear No. 2 World Retailer," New York Times, August 30, 1999.
Tschang Chi-Chu, "Carrefour Readies for Growth in China," International Herald Tribune, April 8, 2003, http://www.iht.com/search/ihtsearch.php?id=92371&owner=(Bloombergpercent20News)&date=20001121010000.
Woodruff, David, "Carrefour Adds Japan to Its Expansion, but Retailer Faces Challenges in Europe," Wall Street Journal, June 10, 1999.