France's Leclerc expects to overtake Carrefour in 2014

Thu May 16, 2013 9:53am EDT

* Expects to overtake Carrefour a year earlier than planned

* Introduces price-comparison tools for customers

By Dominique Vidalon

PARIS, May 16 (Reuters) - E. Leclerc, France's second-largest retailer, is on track to overtake bigger rival Carrefour in 2014, a year ahead of schedule, thanks to its focus on low prices, its chief executive said on Thursday.

Privately-owned Leclerc also vowed to stay ahead in the price war heating up among French retailers as the economy continues to worsen and consumers become more price conscious.

"I thought that in 2015 our chart line and that of Carrefour would cross, I think we will reach that point one year earlier," Michel-Edouard Leclerc told a news conference.

Losing the top spot in the its home market would be a blow to Carrefour, the world's second-biggest retailer behind Wal-Mart, as it has been fighting to defend its position in a country which still accounts for over 40 percent of its sales.

Kantar research data put Leclerc's national market share at 18.8 percent as of March 24 against 20.5 percent for Carrefour.

Leclerc, a cooperative association of retailers, operates 560 stores in France, mostly hypermarkets. In February, the group predicted sales growth of 5 percent in 2013, and a 0.5 percentage-point rise in market share to 18.9 percent.

France entered a shallow recession in the first three months of the year as the economy contracted by 0.2 percent because of weak exports, investment and household spending, preliminary official data showed on Wednesday.

"Never has shoppers' sensitivity to prices been so strong," said Leclerc, vowing to "stay 3 to 4 (percentage) points ahead in the price race".

In recent years, Leclerc's market share has been increasing at the expense of rivals, and notably Carrefour, which has struggled to improve its price image among shoppers.

Carrefour went on the offensive about a year ago, however, with a low-price guarantee on 500 manufacturer brands, and has embarked on aggressive comparative advertising.

Smaller French rival Casino joined the battle in the last quarter of 2012 and is currently running a lowest-price marketing campaign on 3,000 products.

Leclerc, who said this flow of comparative advertising was confusing for consumers, unveiled new tools on Thursday to allow shoppers to compare its prices with those of rivals using smartphones or in-store scanning machines, as well as online.

"Everyone claims they are the least expensive," Leclerc said. "We want to give shoppers the tools to check."

Last year, Leclerc achieved same-store sales growth of 5.8 percent, outperforming a 1.5 percent French sales decline at Carrefour and a 0.8 percent drop at Casino. (Editing by Mark Potter)

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