01 Oct 1996


Uhlmann Award Winners Focus on French Retailer


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The winners of the 1996 R. Hugh Uhlmann Award for outstanding research in the field of agribusiness have a truly global perspective -- all three recipients are international students. For their prize-winning project, Peter Baeza (Switzerland), Joseph J. Lacson (Philippines), and Yuli Stein (Belarus), all members of the MBA Class of 1996 and students in Professor Ray A. Goldberg's Agribusiness Management Research elective, conducted a study of Carrefour, the French mass-market food retailing giant.

Founded in 1959 by two French retailers, Carrefour introduced concepts of scale and convenience that were revolutionary to the French marketplace -- innovations such as "one-stop shopping, self-service, discount prices, quality products, and free parking," the Uhlmann Award winners noted in their 171-page report on the company. In 1963, the first freestanding Carrefour outlet opened in a Paris suburb with thousands of high-quality, low-cost items under one roof. A new term -- hypermarché -- was coined to describe this phenomenon. French consumers were lured away from their traditional patronage of small, locally owned stores to do their shopping at the mammoth hypermarket.

French consumers were lured away from their traditional patronage of small, locally owned stores to do their shopping at the mammoth hypermarket.

French consumers were lured away from their traditional patronage of small, locally owned stores to do their shopping at the mammoth hypermarket.

While opening other stores in France, Carrefour began expanding into the rest of Europe in the late 1960s. By 1988, the student authors say, "It was the top retail company in Europe with 65 hypermarkets in France and 115 in Europe and South America" -- not to mention 2 stores in the Philadelphia area that eventually failed in the face of an economic downturn in the United States and an onslaught of competitors. After a period of consolidation, the company is now looking for more opportunities abroad and has recently opened stores in China, Thailand, and South Korea. By the turn of the century, Carrefour plans on generating 60 percent of its revenues from international markets.

In their report, Baeza, Lacson, and Stein make several strategic recommendations they feel would strengthen the company. Among their suggestions were proposals that the company adopt a more partnership-based relationship with suppliers, strike a balance between private label and manufacturer brands, and reemphasize food products instead of venturing too far into nonfood items. Although they foresee a fierce battle among retailing Goliaths, the authors conclude that Carrefour's "ability to fly in the face of conventional wisdom, to buck the odds, and to succeed where others have failed is truly remarkable."

First presented 24 years ago, the Uhlmann Award has been offered to HBS students by several generations of the Uhlmann family of Kansas City, Missouri -- most recently by the late R. Hugh Uhlmann's son, Robert (MBA '74) -- "to encourage creative research for the efficient and equitable growth of domestic and world agribusiness." It includes a cash award to be divided among the recipients.

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