As is quite predictable periods of slow economic growth retailers review their activities and divest from those that are not core. It does beg the question really of why or how they got into non-core activities in the first place, you should always stick to doing what you do best...
Anyway this week the news is full of International retailers pulling out of particular markets - mostly they will loose many millions of invested money in the process, and such withdrawal, although possibly the right strategic option now, highlights questionable decisions to invest in the first place some years ago when money was cheap.
Two such notable divestment this week are Carrefour divesting from Thailand - selling stores to Casino, and Metro group selling their Moroccan stores to Label Vie who runs Carrefour franchise stores in the country. So much for Metro group having such a well developed market scanning process to research the most appropirate markets to enter (Swoboda et al - sure you remember...). There is a common theme here though with consolidation in all markets driving retailers who have entered spotting opportunities to now divest on the realisation that they cannot acheive a market leading position in these markets. In Thailand Carrefour has simply lost the race to Tesco (Lotus) who enjoy strong market leadership. In the face of this Carrefour would rather exit and focus on market that they can lead and as such drive the sector in it's own direction.
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