Stephane Maquaire, CEO do Grupo Carrefour Brasil | SHOW BUSINESS - 24/07/2024

Good evening, welcome to Show Business, the most traditional business talk show on Brazilian TV. On today's program, we will receive the Frenchman Stéphane Maquaire, CEO of Carrefour, the largest food retail group in Brazil, owner of brands such as Atacadão, Sam's Club, and Carrefour itself. In the first quarter of this year alone, the group's sales in the country reached 27.8 billion reais, an increase of 2.5% compared to the same period last year. The executive will talk about the differences in retail between countries, the reasons Brazil is exporting a supermarket brand to France, and why the cash-and-carry model keeps growing in the country. I am Bruno Meyer, and welcome to today's Show Business.

He is the engineer who swears he never considered leaving his home country, France. However, the plans didn't work out as planned. After all, since 2021, after a stint in Argentina, Stéphane Maquaire has been the CEO of Carrefour Group in Brazil, the largest food retail group in the country, owner of brands like Atacadão, Sam's Club, and Carrefour itself, with around 1,200 points of sale and 130,000 employees. Last year, Carrefour Brazil's revenue was over 115 billion reais. We will welcome Stéphane Maquaire on this program. Thank you for accepting our invitation here on Show Business.

And about the country's economy, because people are perhaps increasingly looking for more products at lower prices. Is it a general trend in many countries around the world? Purchasing power, with the inflation that was very high in recent years in many countries, our customers are looking for lower-cost solutions. There is a trend to see that life is more expensive, and we, as retailers, have to respond with new solutions for this constrained purchasing power.

You've been at Carrefour for a short time, since 2021, in Brazil, and since 2019 in Argentina, when you became CEO of Carrefour in Argentina. But Carrefour's presence in Brazil, the group has been here for 48 years, will be 49 years in September. What is the change in the consumer profile, talking about the Brazilian consumer in recent times, Stéphane? Obviously, the world has changed a lot. The consumer is a consumer who needs more purchasing options. Before, we had one store to buy our food products. Today, we are looking at the consumer with many options. What is very relevant is the digital channel. In the last 4 years, it wasn't like that. You would go to a point of sale and that was it. Now we are talking about a group...

I opened the program defining Carrefour as the largest food retail group in the country, but with your superlative numbers, I can say that in fact it is the largest retail group in the country, right? Exactly. With the size we have, we are a giant, we have a responsibility. We have, I always say, 130,000 employees, so we are responsible for roughly 130,000 families, many more people besides our employees. And in fact, because we have this size, we are one of the largest employers in the country.

Now, I presented a number of yours from last year that had growth. But if we look at Brazilian retail companies, we see several companies with difficulties in the country. I'm not talking about food retail, I'm talking about other types of retail. Is this reality of difficulty not something you are facing? For example, at the beginning of 2024, how has the year been? 2024, we saw a return with more strength in our stores, with more assortment, with more frequency as well. So we are seeing good growth in our sales across all our businesses.

We are talking about the cash-and-carry model, Atacadão. Today, how much of your business does it represent? 70% of our sales, which is very relevant. We call it the Carrefour Brazil group, but in fact, it's the Atacadão Brazil group. We are a publicly traded company, and our stock is called Atacadão. Atacadão is now the personification of the success of Atacadão. I think it is translated by the export of the brand to France, right? What pride! How did that happen? Why did you decide to export Atacadão to France? For the reason we mentioned at the beginning: in France, purchasing power is also becoming complicated for people after years of food inflation. And we decided that Atacadão is a good response to this complicated purchasing power for many people in France. A first pilot. Let's see how the French receive this new model.

It's very recent. You already opened it? We opened it about a month ago. Very recent. Can you draw any conclusions from this pilot you are doing? Not much, it's very early. It's quite complicated because when you open, people get interested, and then you have to have customer loyalty and develop the customer base. It can be a hit at the beginning, and then no one comes back. No one? No, but a little less. The secret is loyalty. Exactly.

What Brazilian lessons are being exported there with Atacadão to France? A simpler purchasing experience for the consumer, a simpler operation for the company as well. Products in the center of the pallet, simplified product categories. That's a bit of the secret of the cash-and-carry model. Now, the Brazilian service, that service even at the checkout, will it be exported to France in some way? Ah, the way of being. Obviously, here there is more warmth, more emotion, people perhaps like to talk a bit more to each other. It's very nice. Did you find that good? Ah, yes. The visitors found it good? They found it good to have this Brazilian warmth. Yes, that's good. Each country has its own way of being. But here, it's true that it's very warm.

Throughout this Show Business, we have the participation of some of this army of 130,000 employees in Brazil. We selected three of your employees to ask questions. Not every day you have the opportunity to be in front of the CEO, and you will have that opportunity now on Show Business. Let's see the first employee who has a question for you.

Hello Stéphane, how are you? My name is Wellington, I'm a commercial manager here at Atacadão, and I'd like to ask you a question: how was the reception of Atacadão's arrival in France, and I'd also like to know if there are plans for more units there? Thank you very much and see you later.

We talked about, I opened the program even introducing Stéphane, talking about a personal particularity of his: he never thought about leaving his home country, France, and suddenly he is in Brazil. First of all, are you enjoying Brazil? Very much, very much. We talked about the warmth and the service, the energy that people have in the country, the size of the country. So for a retailer, the possibilities for growth are infinite. So it's a very nice country. And when you received the invitation to be CEO in Brazil, first in Argentina and then in Brazil, what was your reaction? You would have to leave your home country. In fact, we went through Switzerland. Exactly, the thing is, Geneva is very close to France. And then, let's go to Switzerland. Well, it was the French-speaking part of Switzerland, but it has its... Geneva and the French-speaking part, but the Swiss part that speaks German, and that's where I really... I loved it. So, by chance, we passed through there. My wife and daughters were living in France, so it was very similar. But in reality, in the region that speaks German, it's another thing, another way of working. When I received the invitation for Argentina, I thought, well, it's an additional step: Latin America. Let's go. Our daughters were very engaged. My wife, after years of asking to leave the country, she wanted to have this experience with our daughters. And suddenly, here in Brazil. And Brazil is one of the largest countries in the world, obviously in geographic terms, but also in terms of economic potential. For Carrefour, it is the second country of the Group.

How many countries are there? 40 countries, if we include all countries, including those where we have franchises. And Brazil is the second. That's interesting. In past editions here on Show Business, we received Benoît Bazin, the global CEO of Saint-Gobain, the French construction giant that is in 76 countries, and he said that Brazil is in third or fourth place. For French companies installed in Brazil, in many cases it is one of the first countries in terms of size. For these companies to be successful in Brazil, is that it? Yes. Sometimes there are some difficulties, but for us it is a success. I think the good choice we made was to buy Atacadão and make it grow to represent 70% of our sales, as we said.

It's important to touch on this point because you made recent acquisitions. You're talking about Atacadão in 2007, then there was Grupo Big, Sam's Club, and Makro. How is the integration going now? First of all, is it 100% complete? Yes, it's complete since July or August of last year, the previous year. We bought Grupo Big in June 2022. It was 12 to 15 months of a lot of work to convert, integrate systems, go from one system to another, change distributors, create a new culture, unite the teams. A lot of work, and it ended in July or August of last year.

I imagine that when you talk about all this integration, perhaps the biggest challenge of uniting all these brands is uniting the culture of the organization, because they are companies with different cultures, born in different ways, and suddenly you have to unite the culture. How do you unite the culture of several distinct organizations into one, which is the case of your company? We prepared before the effective purchase of Grupo Big to understand a little the elements of culture in the various parts: in Atacadão, in Carrefour, in Sam's Club, and in the various banners of Grupo Big. And we formed the 4 pillars of our culture: respect and inclusion, which is very important to include all people regardless of color and the company where they worked before the merger; courage; cooperation among us; and the customer, obviously. The commitment to the brand, what to do and how to do it. We built this new culture journey, and I think it was a success.

Now we are talking about successes. Let's talk a little about mistakes. Was there any mistake in this integration? Yours? No, the company's. Was there any mistake that you consider was made, because there are many integrations at the same time? An example that we didn't see in the systems: the difficulty of changing from one system to another. We chose the Carrefour system in some situations, and one of these systems came very close to not being able to include all these new stores that came from Grupo Big. And we went through, in July of last year, moments, hours that were very complicated, where we didn't know if the next day we would be able to supply our stores. That, for example, we should have prepared better beforehand and seen the limits in the technology of that system.

You mentioned this issue of system complexity. Have you been attacked by hackers, as other Brazilian retailers have been? Yes, but we never reached a point of very dangerous negotiation. Touching wood here. We prepare a lot. It's a constant race to ensure we are protected. And these attacks also come from outside the country, not only here. From anywhere on the planet, they can enter through another country of the global Carrefour group and finally reach Brazil, or from Brazil to other countries. So there is a specific... I ask this question because it is a topic I frequently raise with executives who participate here on Show Business: cybersecurity. Because both you and other retailers in the world have already suffered attacks on customer data.

In parallel, I wanted to get into a subject that I also frequently talk about with executives, which are the two most cited words in the global corporate world recently, although the technology has been around for a good while: artificial intelligence. When was the first time you heard about artificial intelligence? It's recent, and the first time was in Switzerland. My CTO in Switzerland brought this to us. I remember well because we talked about many things about artificial intelligence, machine learning. That's it. The limit of working in other languages is that for new concepts, you don't have words even in your own language. So you have to understand and then be able to speak in several languages about these new concepts. It was the same. It was very interesting. I was in Argentina when the pandemic arrived, and new government measures came in, our quarantine measures. All these words that I never used in French, then to explain what I was doing in Argentina to overcome the moment, explaining this to the global team was very complicated because I didn't have these words in another language, in Spanish. So it's interesting how new concepts... you finally have an idea, you understand the concept, but you don't have it in the language you work in, but not in your own. It's a bit like that.

And how did you deal with these changes? You speak your original French, then German, then Spanish, and then you come to Brazilian Portuguese. Was it all very difficult, or do you have an aptitude? I thought not. I didn't want to work outside my country also because of the issue of having to speak another language. What I can say is that it's like jumping into cold water. So you go, you work directly in the new language. The first few days are very complicated to understand, but the learning curve is very, very fast. And the second point is that each time it gets easier, because the brain ends up being more prepared to learn new languages.

Let me go back to the subject of artificial intelligence, because we were going down the path of language, which is also very interesting. We talked about intelligence, the intelligence of the human brain, human intelligence. But now I want to talk about artificial intelligence. How has artificial intelligence already arrived in retail? How has it arrived in your business? We are analyzing our internal data. We receive 2 million customers per day, so we have a lot of data. We are using artificial intelligence in many pilots still, to make some predictions, to optimize some activities to improve our service to the customer.

Now, you went through France, Switzerland, then suddenly Argentina in the middle of the pandemic, and now Brazil. What are the biggest differences in retail in each of these regions? In Brazil, consumption is more... how can I put it? People here, consumers, use a lot more credit through cards, indebtedness. So it's consumption that takes advantage of indebtedness. Obviously, when the interest rate goes from 2% to 13.75%, as was the case last year, it complicates life a lot. So we have these consequences on the purchasing power of Brazilians that perhaps we don't have much in Switzerland or France. In France, people get into debt to buy a house, not to buy food products. Here, it's more common to use it for any moment in life.

Now, you went through Argentina, a country that is another country, with inflation through the roof in 2019, 2020. How was that? It's very different from Brazil, yes. Here, we were able to take advantage of this difficulty in food inflation by offering our customers always the lowest price compared to the competition. And when you have 10% or 12% inflation per month, if you can hold off with some suppliers for 15 days of inflation, you have a very high differential with your competitors. So that's what we understood in Argentina. When you have, like France for example, last year or in 2019, 1% annual inflation, even if you manage to hold off 15 days of the month's inflation, the differential is so small that it doesn't change the customer from one banner to another. In Argentina, with this high inflation, we were able to do that, and suddenly we were very successful in recent years.

You know there is a rivalry between Brazil and Argentina, right? You know about that? Especially in the soccer teams. You know about that? It's a bit like the French and the English. So it's true, it's true. You're used to that. Now, in these 48 years in Brazil, there is another particularity of the changes in the Brazilian consumer profile that I imagine are the markets close to consumers' homes, which in your case is called Carrefour Express. I'm in São Paulo, I see one near my house, for example. Is this a reality? Is it a global phenomenon, a phenomenon of developed or developing countries, or is it a Brazilian phenomenon? It's more of a phenomenon in Europe. We have thousands of this model in France. Here, we have 140 Express stores, and only in the city of São Paulo. So this is a fraction of what exists in France. We still have a lot of strength in Brazil in the larger format stores, where you can buy absolutely everything you need. And besides, São Paulo is a city where you go more by car than on foot, and these stores also need proximity for people who come to the store on foot, not only by car. That's why the development is smaller in Brazil than in Europe.

Let me talk a little about you, Stéphane, about your professional trajectory, which is undoubtedly remarkable. You graduated from one of the most prestigious engineering schools in the world, in Paris, but you didn't work in retail. You started in auditing. And in recent years, you ended up in retail. How did you go from engineering to retail? Well, I haven't finished my career yet, I'm still in the middle. In auditing, I was already in a more financial area, looking at the numbers of many companies and many sectors. So I learned to know many sectors: oil, cosmetics, a little bit of retail. In fact, my first mission there in that audit was Carrefour. Ah, it was Carrefour! So you already had a connection. I discovered a little more about retail. And from this audit, I worked at a shopping center real estate company, and then I understood a little more about retail. And I went from retail to food retail in France, and for the last 16 years I've been working in this business.

You've been through several sectors, as I said: auditing, then shopping centers, real estate, and now food retail, dealing with people daily, commanding a group of 130,000 employees in Brazil alone. What characteristic do you think is fundamental, regardless of the segment, to lead a company, to lead a team? I think what is important is to lead by example. It is important that the leader is recognized for what he is doing, not just talking. So the way of acting, with presence, with proximity, with transparency, also ensuring that we tell the reality of our business, talk truthfully about what is positive and what is a difficulty to be worked on. A leader of proximity is very important, because otherwise you end up being in a closed office, and the people, the teams, cannot connect. And I think this connection greatly facilitates the execution of our plans.

At the beginning of the program, we showed an employee asking a question about Atacadão in France. We have another participation from an employee in Brazil, and let's watch a question for Stéphane.

My name is Anam Paci, I am the manager of the Sam's Club Jabaquara in São Paulo. My question is: today, Sam's Club is a growing format and has been delivering good results within the company. I would like to know, Mr. Stéphane, what are your expectations for Sam's Club Brazil? Thank you very much.

Just to explain to our viewer: it's a model where you have a kind of membership. You have to be a member, so you pay a fee at the beginning of a 12-month period, and then you can buy in that store, taking advantage of exclusive products from the Sam's Club brand, which is an exclusivity that exists in these stores, both food and electronics products. I asked a lot: what do we see for the future? Will we maintain this pace of openings? Do you already have a set number of how many you intend to open in Brazil? We have already said that from the 40-something we received in June 2022, we can double the number of stores in the country. So 80 to 90 Sam's Club stores in Brazil is a target we have, and I think we will go that way.

What timeframe? So you're saying we received it, we've already grown quite quickly in 18 months, almost 2 years, with more openings. And in the next 4 to 6 years, we will get closer to those 80 stores. Yes. And is there a specific market you are looking for more? Places with higher income, more for A and B customers. Sam's Club is for people who live in the largest cities in the country, often state capitals.

Speaking of a single brand of the group, now I want to talk about the entire group, because you are responsible for the entire group. What are the plans in Brazil for the near future? Let's talk about 2025. Continue growing in the country, continue opening Sam's Club stores, as we already mentioned, proximity stores in the Express format, continue growing. We haven't talked about our digital arm, e-commerce, which is growing. This year, it grew more than 50% compared to the previous year. How is the digital side of the group's businesses? It is present in Atacadão, Sam's Club, and Carrefour, and globally it represents 9% of our sales. So out of 115 billion reais, 9% comes through our digital channels. So it has relevance, and we continue working on this channel to keep up with the Brazilian consumer. The Brazilian consumer, like in other countries, needs various formats and various channels for different moments in their life.

Very well. We are talking on this program with Stéphane Maquaire, CEO of the Carrefour Group in Brazil. Show Business will take a short break, and we'll be back with another segment with Stéphane. Until then.

And we are back with Show Business, with an interview with the CEO of Carrefour Group in Brazil, the Frenchman Stéphane Maquaire. We haven't talked about a tragic situation that happened in Brazil starting at the end of April, the climate tragedy that hit the state of Rio Grande do Sul with the floods, which still have consequences for the people of Rio Grande do Sul. You have 100 stores in Rio Grande do Sul. What were the immediate measures you took when this tragedy hit the state?

You mentioned that it became a national topic. At any point, did you think there could be a shortage of rice, for example? Because rice in France... 4% of the world's rice comes from there. So in this situation, giving tranquility, talking about a rice shortage is very relevant for food in Brazil, where people eat rice and beans almost every day. Here, we have to be careful not to generate a price peak ourselves in our stores. And finally, after weeks, we saw that rice remained in our stores at a controlled price.

We have a third and final question now from a group employee here in Brazil for Stéphane Maquaire. Let's watch the last question.

My name is Francinete, I am responsible for the Carrefour hypermarket in Águas Claras, and I would like to know what is the best leadership advice you could give to someone.

Look, this is a question that frequently appears here on Show Business, often in the comments. Our audience is very varied, and since we only talk with highly successful executives, this question always comes up: leadership tips. What are yours?

Now, in the first segment, we talked about your trajectory, Stéphane: engineer, started in auditing, went through other sectors, and you mentioned a stint in the real estate sector. It's curious how people's trajectories often connect, as yours did, leading to today. Many people don't know, but the group here in Brazil operates, beyond supermarkets and hypermarkets, with gas stations, drugstores, and a real estate division. How does the group enter this? And there's also the financial side, because you have a bank. Exactly, we have a bank that is the sixth bank in terms of the number of cards we have. The sixth Brazilian bank. That means that, in fact, it's not just what we've been talking about in the first two segments. Gas station, drugstore, the real estate division. I wanted you to explain a bit, for example, why you have so many real estate assets. We built in the country by buying land and building stores. When we arrived, 48 years ago, we started expanding, buying land and building stores. So on many occasions, we are owners of our stores. And to keep up with what our customer needed in recent decades, we also opened galleries in front of our stores. And this real estate area takes care of our buildings and also these galleries. And obviously, with the number of stores we have, we are very relevant owners.

Now there is a point that is not common for a food retail group, which you are talking about: the franchise point. You are now franchising Carrefour Express. It's a pilot in the Express format to see how we can expand more quickly. It's a model that works for a person who works in a building, in garages, for example, also in some situations in hospitals, for the people who work there to be able to do some shopping. And there is already a lot of demand. Yes, we have many people who want to take advantage of this franchise, but we are doing a pilot. So we are going slowly, let's see how it works, and then we can expand. Exactly.

Look, we were talking about leadership, based on a question from an employee. I find it very curious when I interview executives who command more than 100,000 professionals, because as you reinforced here on the program, you deal with more than 100,000 families. How do you maintain the morale of this army of Brazilians who work daily with you? A lot of communication. Communication. You have to communicate in the most direct way possible, which is obviously a challenge with this number of people. Thanks to digital tools today, we have more possibilities. We have an internal study platform, a campus, that can connect thousands of employees and allow us to communicate what we are doing, the difficulties, the challenges we are facing, and ensure that everyone understands what we are working on.

And how do you surprise a customer in such a competitive environment as food retail? Is there something that hasn't been created or invented yet that you would like to implement in the group's businesses? What we did recently was quite talked about: we proposed to our customers in the Carrefour hypermarket model a second price if they buy more products, the same product 3, 4, 5 times, which is more the Atacadão model, the cash-and-carry model. And this is an absolute success. Ah, you offer two or three products at a lower price per product. So, for example, you buy a box of rice with 3 units, you have a lower price per product. This is a new initiative that hasn't been done before and has had great success.

What surprised you most about Brazilian culture and the way of doing business here in Brazil? This energy. How communication... the most important part of my work is seeing people directly get energized by what you are saying. So a very fast force, a faster force from our employees here, because of this energy that people have in the country. And you have traveled a lot around our country. I already asked this in the first segment if you are enjoying the country. You swore you wouldn't leave France, you are here, and you said you like it a lot. You have traveled a lot. What did you like the most, as a person, with your wife, traveling around our country? I would choose the Pantanal. I really liked the Pantanal. We've been there three times. We've been to some beaches, obviously, but the Pantanal is incredible nature. I really like this untouched nature.

Is it more difficult to do business in Brazil or in France? Ah, each country... In France, the labor laws are also heavy. I would say each country has its challenges. The size of the country here is obviously a challenge to supply the stores. Obviously, the state organization is also a bit complicated. I don't know another way to organize it. But each country has its challenges. We can't say it's more difficult here or there. It depends.

Do you have any reference in the business world, someone who inspires you? It doesn't have to be just in the business world, it can be in life itself, Stéphane. Ah, this question is always complicated. I change my mind often about what I am looking at. In the retail world, obviously Amazon is a reference. I discovered Mercado Livre here, which I didn't know. Exactly, its largest operation is here, more than 53% comes from Brazil. So the capacity of these companies to operate with great agility... what I am looking at is the agility of these companies. We, with 48 years, have difficulty achieving this agility because we have processes, organizations, many models, many connected systems. It's another thing. So these new companies that go straight to the point, because they were born more recently, but they have a strategy to facilitate all this that we are working on. We are working on it, as in the digital area. So today, can I say that you, in a way, elect Mercado Livre as a reference in business? I think we can say that. Exactly.

Very well. We talked on this program. It was a great pleasure to have you. I thank you for accepting our invitation and revealing the secrets behind this group that is the largest food retailer in the country, but due to your size and the businesses you have, especially with 70% of the business coming from Atacadão, which is the cash-and-carry model, you are the largest retailer in the country. Exactly. Thank you very much, and I thank you for your presence here on Show Business. We spoke with Stéphane Maquaire, CEO of the Carrefour Group in Brazil. Show Business ends here. Thank you very much for your audience and your trust. We'll be back next week. See you then.