Lars Olofsson

Lars Olofsson is not afraid of making difficult decisions. He has been at the helm of giant retailer Carrefour for little more than a year and has already exited several underperforming markets and brought in an almost entirely new top team.

The Swede, who took over from José Luis Duran in January last year, has a tough task. His predecessor left after a boardroom struggle involving activist investors such as Bernard Arnault, billionaire chairman and chief executive of luxury goods group LVMH, and Olofsson has to ensure his transformation plan meets investors’ expectations.

Last week Carrefour reported a first half net profit of e82m (£68.4m) against a net loss in the same period last year of e58m (£48.4m). The figures were below expectations, but most think solid progress is being made.

Olofsson is focusing on Carrefour’s domestic French market and key European countries. He is piloting a new hypermarket format, Carrefour Planet, which he hopes will make shopping pleasurable again for customers.

Michael Poynor, managing director of Retail Expertise, says it is “ironic” that Olofsson is prioritising the rejuvenation of the domestic market, given his “global perspective built up from his 30 years at Nestlé”.

He adds: “The French market makes up 40% of the business so it seems necessary for him to prioritise that in the medium term, but the other top grocers such as Walmart and Tesco are putting their focus on international growth so Olofsson can’t lose sight of that either.”

The self-assured Olofsson - who started his career in 1976 at Nestlé as product manager for Findus and worked his way up to be executive vice-president in charge of strategic business units, marketing and sales worldwide -may have a global outlook but he also has one of the key skills needed to turn around the French hypermarkets: sales and marketing experience.

Planet Retail retail analyst Magali Dubreil says the Planet format is “very impressive” but warns that hypermarkets in general in France are facing problems with price perceptions, and Olofsson’s sales and marketing experience is key to addressing this point.

“Promotions are well presented in the new Planet store, and the format is much cleaner, so it’s a good start but it’s too early to say yet whether it will help turn around the domestic market,” she says.

One former Carrefour executive says what the grocer needed was new blood, and Olofsson has delivered that. The executive says: “The business is facing huge cultural change as Olofsson has recruited his top team from outside, and often from competitors, but it’s what Carrefour needed.”

One key appointment praised by analysts was the hiring of former Tesco director James McCann as chief executive of Carrefour’s French business. Evolution analyst Dave McCarthy says in recruiting McCann, “Carrefour has taken a very big, bold and brave decision”. He adds that “it is to the current management’s credit that they are looking to a Tesco person to teach them”.

Across the globe, Olofsson - who is fluent in five languages - is wielding the axe. He is seeking to exit underperforming markets - he dropped Russia last year and is in talks to sell operations in Singapore, Malaysia and Thailand.

And he will bring in new local teams wherever necessary, as recently in Brazil. The former Carrefour executive says: “Previously if teams were replaced, those people were recycled and would pop up somewhere else but that’s not happening now. That means everyone has to sharpen up.”

The charismatic and energetic Olofsson, 58, is shaking up the French grocer. He is straight talking, and has created a high adrenalin environment in which the consequences of underperformance are much more severe than in the past.

No longer will the world’s second biggest retailer accept second best.