Carrefour SA, the world’s second-largest retailer, has said it is exiting India by closing its all five cash & carry or wholesale stores in the country which it has been operating for the last four years, according to a company statement.
Although the firm has not provided a reason for the exit, media reports said the company is cutting down the operations in underperformed markets to focus on its home market.
"The closure of Carrefour’s business in India will be effective at the end of September 2014. Until that time, the company will continue to be fully engaged with all its employees, suppliers, partners and customers to ensure a smooth transition," it said.
"Although the new Indian government does not support foreign retailers coming into the country, I think Carrefour’s decision to exit the market is because of the problems the French retailer is experiencing,” according to Sourindra Banerjee, assistant professor of marketing at Warwick Business School.
He noted that Carrefour is pulling out of other emerging markets as well, as its revenues have dropped.
"Having said that, India is not an easy market to operate in for any foreign retailer,” he added.
In India, Carrefour has stores in Delhi, Jaipur, Bangalore, Meerut and Agra.
This is the first exit by a foreign retailer from the Indian market, which was opened to foreign chains with riders.
A number of global chains such as Walmart and Metro operate wholesale stores in the country. British retailer Tesco is the first foreign retailer to enter the multi-brand retail space with a joint venture with Tata Group.
The Carrefour Group is a second-largest retailer by sales in the world. It employs around 3,65,000 people in more than 10,100 stores in 34 countries. The firm generated net sales of around €75 billion in 2013, almost half from its home market.
In the past few years, supermarket operator has also exited markets like Greece, Colombia, Singapore and Malaysia among others.
Early this year, the firm was reportedly in talks with Bharti Retail to sell its business in the country and was said to have roped in KPMG to advise on sale of the business.
Last year, Walmart Inc, the world's largest retailer, bought out its local partner in the Indian JV and is now building its wholesale store business on its own.
(Edited by Joby Puthuparampil Johnson)