1. 1 A Service Strategic Preview: Q3 July - September 2012 8 October 2012 GILDAS AITAMER Associate Analyst NATALIE BERG Global Research Director

2. 2 Analyst Comment: Strategic Preview: Carrefour Q3 “We are expecting yet another weak quarter, hampered by Carrefour’s Western European operations. Its core domestic market, which has been the root of its problems, will not be fixed overnight but we are encouraged by the pragmatic approach being taken by Georges Plassat. In France, the retailer has made some solid strides, particularly around own label and multi-channel during the quarter, but it is still far too early to see any signs of these initiatives bearing fruit. Looking ahead, we believe the future for Carrefour lies in deeper segmentation of its hypermarkets in order to ensure that merchandising and marketing initiatives are targeting the appropriate demographic.” “We are expecting yet another weak quarter, hampered by Carrefour’s Western European operations. Its core domestic market, which has been the root of its problems, will not be fixed overnight but we are encouraged by the pragmatic approach being taken by Georges Plassat. In France, the retailer has made some solid strides, particularly around own label and multi-channel during the quarter, but it is still far too early to see any signs of these initiatives bearing fruit. Looking ahead, we believe the future for Carrefour lies in deeper segmentation of its hypermarkets in order to ensure that merchandising and marketing initiatives are targeting the appropriate demographic.” GILDAS AITAMER Associate Analyst “All eyes are on Plassat as Carrefour reports its first quarterly update post-Olofsson. While we do not expect Plassat’s arrival to have had a tangible impact on the business in Q3, we are confident in the strategic vision he has laid out. Carrefour is still years away from any hope of legitimate recovery. A radical reconfiguration is needed, particularly at home, in order to continue viably trading with the hypermarket. Internationally, Carrefour’s results are likely to echo a similar message heard from Tesco last week. Central Europe remains fragile due to the Eurozone crisis, while a deceleration in the Chinese market is likely to ring further alarm bells. Underperformance in China and Turkey, as well as a slow start in India, will raise questions over Carrefour’s ability to juggle lucrative international opportunities with a deteriorating core domestic market. Latin America remains the retailer’s only saving grace.” “All eyes are on Plassat as Carrefour reports its first quarterly update post-Olofsson. While we do not expect Plassat’s arrival to have had a tangible impact on the business in Q3, we are confident in the strategic vision he has laid out. Carrefour is still years away from any hope of legitimate recovery. A radical reconfiguration is needed, particularly at home, in order to continue viably trading with the hypermarket. Internationally, Carrefour’s results are likely to echo a similar message heard from Tesco last week. Central Europe remains fragile due to the Eurozone crisis, while a deceleration in the Chinese market is likely to ring further alarm bells. Underperformance in China and Turkey, as well as a slow start in India, will raise questions over Carrefour’s ability to juggle lucrative international opportunities with a deteriorating core domestic market. Latin America remains the retailer’s only saving grace.” NATALIE BERG Global Research Director

3. 1.Expectations for the Quarter 2.France: Q3 Strategic Changes 3.Global: Q3 Strategic Changes 4.Outlook 5.What’s new at Planet Retail Strategic Preview: Carrefour Q3

4. 4 Carrefour’s price-focused strategy Reset has thus far failed to result in tangible improvements to topline sales.

5. 5  We are not expecting any tangible signs of improvement during Q3, given the continued pressure on discretionary spending across Europe as well as heightened competition at home.  Overall, we remain confident that Georges Plassat’s realistic approach will benefit the retailer. Further decentralisation will boost flexibility, which will enable Carrefour to quickly and precisely respond to customer expectations, and more effectively compete with fast-growing chains like Leclerc.  Outside Europe, we are expecting Carrefour to tell a similar story to Tesco which saw like-for- likes decline in half of their international markets in H1.  We are not expecting any signs of improvement in China where Carrefour has seen like-for-like sales decline for the past several quarters. A slowdown in expansion or even closure of some stores would not come as a surprise.  We will also be looking for an update on key strategic markets such as plans for India given the recent FDI announcement as well as its Turkish operations. Another weak quarter expected for Europe’s largest retailer.