Carrefour’s decades-long presence in China is nearing its end, after controlling shareholder Suning announced it would sell four of the supermarket chain’s regional subsidiaries for just RMB 4 (US$ 0.55).
The announcement, made June 20, marks a symbolic collapse for one of China’s most prominent foreign retail brands. Suning, which bought an 80% stake in Carrefour China in 2019 for RMB 4.8 billion (US$ 662 million), said it will now pivot back to its core home appliance business.
The four subsidiaries—based in Ningbo, Hangzhou, Zhuzhou, and Shenyang—have all ceased operations and are saddled with debt. Suning said it hopes to bring in external firms to restructure the companies.
Founded in 1990 and headquartered in Nanjing, Suning has long dominated China’s home appliance sector. The company reported RMB 56.79 billion (US$ 7.83 billion) in revenue in 2024, down 9.3% year-on-year. Net profit rose 114.9% to RMB 612 million (US$ 84 million), but financial pressures remain high, with a debt ratio of 90.6% and widespread defaults on payments and loans.
Carrefour’s brand still carried weight at the time of the acquisition, even as the French retailer was already deep in the red. The 2019 deal was described by analysts as “Carrefour marrying down to Suning”—a marriage that has now unraveled.
From Market Leader to Cautionary Tale
Carrefour entered China in 1995, introducing self-service shopping and centralised checkout at a time when most retail operated behind counters and glass displays. The format revolutionised the Chinese shopping experience and helped Carrefour expand rapidly.
The retailer also introduced China to the slotting fee model, requiring suppliers to pay for shelf space, product placement, and in-store promotions. The model, which became widespread across China’s retail industry, was especially influential in the wine sector. Domestic brands like Changyu and Great Wall paid large fees in exchange for prime placement and volume sales through supermarket-exclusive products.
At its peak in 2008, Carrefour operated more than 300 stores in China and posted RMB 33.82 billion (US$ 4.67 billion) in annual revenue—ranking as the country’s most successful foreign supermarket chain.
But its reliance on supplier-funded logistics and a slow response to the rise of e-commerce left it vulnerable. By 2018, Carrefour China’s net assets had plunged to negative RMB 1.93 billion (US$ -266 million) with a debt ratio of 118%.
Suning initially promised a turnaround, including a pledge to open 300 new stores in five years. Instead, the business deteriorated. Between 2019 and 2023, Carrefour China posted cumulative losses exceeding RMB 8.5 billion (US$ 1.17 billion). Its store count fell from 233 to just three.
Slotting Fees Fall Out of Favor
Carrefour’s collapse also highlights the broader decline of the slotting fee model in retail. Once a standard for brands looking to gain shelf space, the model has lost appeal in an era of greater price transparency and digital competition.
“With today’s pricing transparency, the slotting fee model simply doesn’t work anymore,” said Shen Yi, a veteran wine executive. “Years ago, consumers didn’t know much about wine, and supermarkets could move volume with high markups. But the costs were always passed on to the consumer. That doesn’t fly today.”
The model also led to distorted pricing. Some wines were listed at RMB 300 in-store, while selling for RMB 200 through group-buying platforms. These tactics not only undercut retailer margins but also eroded consumer trust, turning supermarket wine aisles into cluttered, inconsistent spaces.
Retailers Shift to Direct Sourcing
Newer entrants like Sam’s Club, Costco, and Aldi have taken a different approach—eschewing slotting fees in favor of direct sourcing at net prices. This eliminates intermediaries, improves margins, and aligns better with changing consumer expectations.
A former executive at a major domestic chain told Vino Joy News the company is now reducing partnerships with wine importers, instead sending buyers directly to wineries. Procurement performance will be tied to actual sell-through, part of a broader effort to rebuild supply chain efficiency and trust.
A former executive at a major domestic chain told Vino Joy News the company is now reducing partnerships with wine importers, instead sending buyers directly to wineries. Procurement performance will be tied to actual sell-through, part of a broader effort to rebuild supply chain efficiency and trust.
Final Curtain for Carrefour China
Carrefour’s downfall stems partly from mismanagement by Suning. But more broadly, it reflects the decline of a retail model that failed to adapt to a transformed consumer landscape.
With just three stores left in the country, Carrefour’s retreat marks more than the exit of a foreign brand. It signals the end of an era in Chinese retail—one that once shaped how everything from appliances to wine reached the shelves.
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