French retail giant Carrefour plans to take smaller, limited-SKU stores to Tier 2 and Tier 3 cities as it expands its presence in India over the next five years, moving beyond the large-format stores that are anchoring its return to the market.
The retailer, which exited India in 2014 after five years in the cash-and-carry B2B business, has returned with a 50,000 sq ft hypermarket in Greater Noida (West) in partnership with Apparel Group. It is now targeting around 50 stores over the next two years, although the pace could change depending on business performance and potential acquisitions.
“A big part of our network in France is convenience stores. We open a lot of Carrefour Express, and this is part of the strategy here, to open some small stores, limited SKUs, in Tier 2, Tier 3, going forward,” Patrick Lasfargues, executive director – international partnership at Carrefour, told Fe in an interaction.
The smaller formats are likely to come after the retailer establishes its initial network. Apparel Group owner Nilesh Ved said the partners could look at entering smaller cities after three to five years.
For now, Carrefour is building its network around hypermarkets and supermarkets. Its Greater Noida (West) store carries about 15,000 SKUs across food and non-food products. A 10,000 sq ft supermarket is expected to open in Ghaziabad within four weeks, followed by more stores across Delhi-NCR and expansion into Uttar Pradesh, Lasfargues said.
Franchise Operating Model
Carrefour’s second India stint is also based on a different operating model. Since 2017, the retailer has increasingly relied on franchise-led international expansion, with local partners investing in and operating businesses rather than Carrefour committing capital directly.
Under its agreement with Apparel Group, signed in 2024, the latter operates the business and carries the profit and loss, while Carrefour earns a percentage of turnover. Carrefour provides its operating playbook and supports sourcing, store design, capex, pricing and merchandising.
Lasfargues said India’s size, economic growth and links with the Gulf Cooperation Council (GCC) made a return attractive, while Apparel Group’s understanding of Indian consumers, real estate and retail operations made it the preferred partner.
The retailer is also evaluating an omnichannel strategy, including e-commerce and quick commerce. Orders could eventually be fulfilled through existing stores or dedicated dark stores, although Carrefour is still assessing the model.
Beyond retail, India could become a sourcing base for Carrefour’s global network. The company has begun developing private-label food and non-food products for its Indian stores, with the potential to supply its operations in the GCC and Africa and, eventually, Europe.
“I would be the best ambassador for products made in India for the Carrefour ecosystem – GCC, Africa, maybe tomorrow Europe,” Lasfargues said.