CEOInterviews.AIStephane Maquaire, CEO of Carrefour Group Brazil | SHOW BUSINESS - 07/24/2024

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Bruno Meer0:01

Good evening, you are watching Show Business, the most traditional business talk show on Brazilian TV. Today we receive the Frenchman Stéphane Maquaire, CEO of Carrefour, the largest food retail group in Brazil, owner of brands such as Atacadão, S Club, and Carrefour. In the first quarter of this year, the group's sales in the country reached 27.8 billion reais, up 2.5% from the same period last year. The executive will talk about differences in retail between countries, why Brazil exports a supermarket brand to France, and why Atacarejo keeps growing in the country. I am Bruno Meer, and welcome to Show Business today.

He is the engineer who swore he never considered leaving his native France, but the plans didn't go as planned. After a stint in Argentina, since 2021 Stéphane Maquaire is the CEO of Carrefour in Brazil, the largest food retail group in the country, with around 1,200 points of sale and 130,000 employees. Last year, Carrefour Brazil's revenue was over 115 billion reais. We will receive Stéphane Maquaire on this program. Thank you for accepting our invitation here on Show Business.

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Stéphane Maquaire2:05

Thank you, Bruno. I want to start talking about Atacarejo, the mix of wholesale and retail that has been gaining strength in Brazil. Atacadão is a great example. What makes people seek it more and more? It is a solution to buy a lot, easily, with even cheaper prices. With a smaller assortment than hypermarkets and well-chosen low prices, it's simpler to operate. It's about the economy—people are looking for lower prices due to high inflation. The consumer now needs more options. The digital channel we have developed is very relevant; four years ago you just went to the nearest store, but now we are a giant. With 130,000 employees, we are responsible for 130,000 families. We are one of the largest employers in the country.

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Bruno Meer4:00

You've been at Carrefour for a short time, since 2021 in Brazil and since 2019 in Argentina when you became CEO of Carrefour Argentina. But Carrefour has been in Brazil for 48 years—soon 49 in September. What is the change in the profile of the Brazilian consumer in recent times?

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Stéphane Maquaire4:32

In 48 years, the world has changed a lot. The consumer needs more options before we had one store; now we look at many options. What is relevant is that the digital channel we developed wasn't there four years ago. You went to the nearest store and that was it. Now, we are the largest retail group in the country. Exactly, we are a giant with a responsibility of 130,000 families. With that size, we are one of the largest employers. In 2024, we are seeing a good moment in sales across all our businesses. It is true that we went through a complicated situation in 2023 after three years of high food inflation. 2023 was very difficult in terms of purchasing power—many people struggled to pay their bills. But in 2024, we are seeing a step-by-step improvement in consumption. Atacadão is our first business, serving consumers and merchants, and it has been growing. It represents 70% of our sales, very relevant. We call ourselves Carrefour Brazil, but actually we are Atacadão Brazil. Our stock ticker is Atacadão. It is a success, and we even exported the brand to France.

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Bruno Meer9:37

What pride! How was it and why did you decide to export Atacadão to France?

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Stéphane Maquaire9:49

For the same reason we mentioned earlier: in France, purchasing power is also becoming complicated due to years of high inflation. We thought Atacadão was a good answer for that. So we started a pilot—let's see how the French receive this new model. We opened about a month ago, very recently. It's too early to draw conclusions—three months is complicated because people may come out of curiosity but not come back. The secret is loyalty. The Brazilian lessons being exported are: a simpler shopping experience for the consumer and a simpler operation. Products are displayed on pallets in the central aisle, simpler, fewer products per category. That's the secret of Atacarejo.

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Bruno Meer12:04

Will the Brazilian service—that warmth at the checkout—be exported to France in some way?

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Stéphane Maquaire12:16

Here there is more warmth, more emotion, people enjoy talking to each other. It's nice. Each country has its own way. Yes, the Brazilian warmth is good.

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Bruno Meer12:45

We have the participation of some of your 130,000 collaborators. We selected three to ask questions. Let's see the first collaborator.

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Wellington13:14

Hello Stéphane, my name is Wellington, I am a commercial manager at Atacadão. I would like to ask: how was the reception of Atacadão's arrival in France, and are there plans for expansion with more units there? Thank you and bye.

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Stéphane Maquaire13:36

Good, Wellington. He is really asking the question we were discussing. It's a national pride to have a Brazilian brand exported to Europe. We are very happy with the beginning. We'll see after three months to decide the next steps. We are starting in France.

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Bruno Meer14:36

I opened the program presenting you, Stéphane, and a personal thing: he never thought of leaving France, and now he is in Brazil. First of all, are you enjoying Brazil?

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Stéphane Maquaire14:54

Very much, very much. The country's warmth, the energy of the people, the size of the country—infinite possibilities for growth. It's a very nice country. When I received the invitation to be CEO in Brazil, first in Argentina, how was my reaction? I had to leave my home country. Actually, we passed through Switzerland first. Switzerland is very close to France. Then Argentina—a step into Latin America. My wife and daughters wanted this international experience. Now in Brazil, which is one of the largest countries in the world in geography and economic potential. For Carrefour, Brazil is the second country in the group, which has 40 countries including franchises. Interesting: in previous editions, we received the global CEO of Saint-Gobain, and he said Brazil is in third or fourth place for French companies. For many, it's one of the top countries for success. There are some difficulties, but for us it's a success.

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Bruno Meer18:15

You made acquisitions. You mentioned Atacadão in 2007, Grupo Big, S Club, and Macro. How is the integration now? Is it 100% complete?

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Stéphane Maquaire19:00

Yes, it was concluded in July/August last year. We bought Grupo Big in June 2022. It took 12-15 months of hard work to integrate systems, convert distribution, create a new culture, and unify the teams. That work ended in July/August last year.

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Bruno Meer19:36

I imagine the biggest challenge was uniting the cultures. How did you unite the culture of several distinct organizations into one?

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Stéphane Maquaire20:07

We prepared before the purchase, studying the cultural elements in Atacadão, Carrefour, and the various bands of Grupo Big. We united everyone, formed 46 pillars, our culture. Inclusion is very important—including all people regardless of color. Cooperation among us, commitment to changes, and building journeys for this new culture. It was a success.

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Bruno Meer21:12

Was there any mistake in this integration?

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Stéphane Maquaire21:18

Yes, we had difficulties with systems. We chose Carrefour's system in some cases, and one system came very close to not being able to include all the new stores. In July last year, we had hours where we didn't know if we could supply our stores the next day. We should have prepared better and checked the limits of that technology.

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Bruno Meer22:25

Speaking of systems, were you ever attacked by hackers like other Brazilian retailers?

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Stéphane Maquaire22:33

Yes, but we never reached a point of negotiation. We touch wood. We prepare a lot—it's a constant race. Attacks come from anywhere. We have a specific team for that.

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Bruno Meer23:31

I ask because cybersecurity is a theme I often raise. I want to talk about artificial intelligence. When was the first time you heard about AI?

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Stéphane Maquaire24:12

It was recent, in Switzerland. My CTO there brought it to us. We talked about AI and machine learning. It's challenging working in multiple languages—new concepts have no words in your own language. You have to understand them and then speak about them in several languages. In Argentina, during the pandemic, we had new government measures like quarantine—words I had never used in French. Explaining that globally was complicated.

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Bruno Meer26:51

Let me go back to AI. How has AI arrived in retail and in your business?

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Stéphane Maquaire27:06

We are analyzing our internal data—we receive 2 million customers per day. We are using AI in many pilots to improve our stock, make some bets, set up laboratories in some of our activities to improve customer service.

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Bruno Meer27:53

What are the biggest differences in retail between France, Switzerland, Argentina, and Brazil?

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Stéphane Maquaire28:13

In Brazil, consumption is more leveraged through credit cards and indebtedness. When interest rates go up, it complicates life. We have consequences on purchasing power that we don't see in France, where debt is for buying a house, not food. In Argentina, with very high inflation, we could offer lower prices than competitors by negotiating with suppliers. When inflation is 10-12% per month, holding 15 days of price gives a big advantage. In France, with 1% annual inflation, the difference is minimal. Because of high inflation, we were very successful in Argentina.

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Bruno Meer30:39

You know about the rivalry between Brazil and Argentina, especially in football? You must be used to that.

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Stéphane Maquaire30:58

Yes, it's true, like the French and English.

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Bruno Meer31:09

In these 48 years, there is another change: neighborhood markets like Carrefour Express. I see one near my house in São Paulo. Is this a global phenomenon?

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Stéphane Maquaire31:40

It's more of a European phenomenon. In France we have thousands of these models, while here in Brazil we have only 1,000 Express stores exclusively in São Paulo city. We still have a lot of strength in larger format stores where you can buy everything. Also, São Paulo is more car-oriented, so proximity stores are less developed than in Europe.

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Bruno Meer32:48

Let's talk about your career. You graduated from one of the most prestigious engineering schools in France, but you started in auditing. How did you end up in retail?

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Stéphane Maquaire33:12

In auditing, I was in a financial area looking at many companies. My first mission there was Carrefour, so I already discovered retail. Then I worked in a real estate company for shopping centers, understanding retail more. Then from retail to food retail in France, and for the last 16 years I've been in this business.

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Bruno Meer34:36

What characteristic do you think is fundamental to lead a company or a team, regardless of the segment?

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Stéphane Maquaire34:52

I think the important thing is to lead by example—being recognized for what you do, not just what you say. Presence, proximity, transparency, speaking the reality of our business honestly. A leader of proximity is very important; otherwise you end up in a closed office and people can't connect. That connection makes execution easier.

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Bruno Meer36:01

We showed a collaborator question about Atacadão in France. We have another participation from a collaborator in Brazil.

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Anam Pa36:14

My name is Anam Pa, I am manager of Sams Club Jabara, São Paulo. My question is: Sams Club is a growing format delivering good results. What are your expectations for Sams Club in Brazil? Thank you.

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Stéphane Maquaire36:45

Excellent question. Sams Club is a membership club we acquired from Grupo Big. We received 42 stores and now have 53, so important growth. We believe a lot in this business. We went from just over 2 million members to more than 3 million now. We have modernized, brought back imported products that the public seeks. We plan to double the number of stores to 80-90 by the end of 2026. It is a format for higher income customers in major cities.

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Bruno Meer40:19

Now about the entire group: what are the plans in Brazil for 2024 and 2025?

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Stéphane Maquaire40:29

Continue growing, opening more Sams Club stores, Atacadão stores, and Express proximity stores. Our digital e-commerce grew more than 50% this year. It represents 9% of our sales—about 10 billion reais. We continue working on this channel to follow the Brazilian consumer, who needs various formats and channels for different moments of life.

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Bruno Meer41:53

We are talking with Stéphane Maquaire, CEO of Carrefour in Brazil. Show Business will take a short break, and we'll be back with more.

We are back with Show Business, interviewing the CEO of Carrefour in Brazil, the Frenchman Stéphane Maquaire. We haven't talked about a tragic situation that happened in Brazil: the climate tragedy in Rio Grande do Sul in late April, the floods. You have 100 stores there. What immediate measures did you take?

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Stéphane Maquaire43:04

First, we looked for our employees—we have 10,000 people working in Rio Grande do Sul. When we saw the situation, we had some complicated cases. We helped shelter them. We quickly expressed solidarity. Inside our stores, we immediately froze all prices for the entire month of May for all products to give peace of mind, because we saw fear of uncontrolled price increases. That became a national topic—the price of rice could not change. We froze absolutely everything. We closed some stores to receive the homeless. We received donations from all over the country via the post office. We offered a closed store for that. We also donated products and acted quickly.

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Bruno Meer46:05

Did you fear a shortage of rice?

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Stéphane Maquaire46:18

We wanted to give tranquility. The supply of rice is relevant for food in Brazil. We managed to monitor without creating a panic. Finally, after weeks, rice remained in our stores at a controlled price.

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Bruno Meer47:14

We have a third and last question from a collaborator.

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Trinete47:27

My name is Trinete, I am responsible for the Carrefour hypermarket in Águas Claras. What is the best leadership advice you could give someone?

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Stéphane Maquaire47:57

I would say courage. Courage to have proximity with our collaborators, to go to the stores to understand what they see in our customers. Courage also to do positive things, to show that we are working to improve. Courage to act, not just decide and let others execute. The leader's presence in the store or with the team is very important.

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Bruno Meer48:52

We talked about your career—engineering, auditing, other sectors. It's curious how trajectories connect. Today, many people don't know that the group also operates gas stations, drugstores, and a real estate division. And you have a bank—the sixth bank in number of cards. So it's more than what we talked about. Could you explain the real estate division?

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Stéphane Maquaire50:11

We build in the country by buying land and constructing. Over 48 years, we became owners of many stores. To accompany what our client needed, we also opened galleries adjacent to our stores. The real estate area takes care of our buildings and these galleries. With almost 1,200 stores, we are owners of a very relevant number.

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Bruno Meer51:17

Now, a point that is not common: you have a franchise pilot for the Express format. How is that going?

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Stéphane Maquaire51:33

It's a pilot to see how we can expand the model faster. It corresponds to people working in hospitals, for example, making small purchases. There is a lot of demand. We are going slowly with the pilot, then we can expand.

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Bruno Meer52:30

How do you maintain the spirit of this army of 130,000 employees working daily with you?

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Stéphane Maquaire53:04

A lot of communication, as direct as possible. Digital tools today allow us to connect thousands of collaborators and communicate what we are doing, the difficulties, the challenges, so that everyone understands what we are working on.

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Bruno Meer54:02

How do you surprise a customer in such a competitive environment? Is there something not yet invented that you would like to implement?

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Stéphane Maquaire54:14

What we did recently is offer a second price in our hypermarkets if the customer buys more of the same product (like three or more). It's the Atacarejo model, and it is an absolute success. It's a new initiative that has received good results.

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Bruno Meer55:19

What surprised you most in Brazilian culture and business style?

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Stéphane Maquaire55:23

This energy. Communication is the most important part of my work. You see people energize by what you say. It is a very fast force. I like the energy of the people here.

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Bruno Meer56:00

You said you never thought of leaving France, but you're here and enjoying it. You've traveled a lot. What did you like most as a person, with your wife?

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Stéphane Maquaire56:20

I chose the Pantanal. I really like the Pantanal—we've been three times. Some beaches too. The Pantanal has incredible nature, intact. I like that very much.

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Bruno Meer56:38

Is it more difficult to do business in Brazil or in France?

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Stéphane Maquaire56:41

Each country has its challenges. In France, labor laws are heavy too. Here, the size of the country and organizing by state are challenges. But we cannot say it's easier or more complicated—it depends.

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Bruno Meer57:22

Do you have a reference in business or life that inspires you?

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Stéphane Maquaire57:33

Amazon is a reference. Also Mercado Livre, which does more than 50% of its business in Brazil. I look at the agility of these companies. With 48 years, it's hard to reach that agility, but we are working on it.

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Bruno Meer59:11

So you can say you consider Mercado Livre a reference in business? I think we can say that. Very well. We had a great pleasure receiving you. Thank you for accepting our invitation and revealing the secrets behind the largest food retailer, but with 70% of business from Atacadão, you are the largest retailer in the country. Thank you very much. Show Business ends here. Thank you for your audience and trust. See you next week. Bye.