Carrefour’s decision is a serious blow to the Estrada administration’s attempt to attract investments into the country, especially after the enactment of the new Retail Trade Liberalization Law.
Instead of coming to the Philippines, Carrefour said it was seriously considering other investment destinations in the region, specifically China, Japan, Taiwan and South Korea.
In a statement, Carrefour representative Luc Dayot said Carrefour’s decision was prompted by a "combination of economic and political factors" that led up to the move to "cast aside" its planned investment in the Philippines.
According to Dayot, the mitigating factors included the weakening of the peso and the stock market index, the less-than-enthusiastic projections of most financial analysts and the generally sluggish grown expected next year. Politically, Dayot merely referred to what he called the "perceived unstable political situation."
"At this point, we are prioritizing our investments in other Asian countries such as China, Japan, Taiwan and South Korea," Dayot said.
According to Dayot, Carrefour had been in close negotiations with the Rustans Group of Companies, specifically Bienvenido Tantoco III who runs the Group’s Shopwise Supercenters.
Expressing disappointment, Tantoco said Rustans understood Carrefour’s decision to postpone their entry into the country. "We acknowledge that all major economic indicators do not encourage substantial investments in the Philippines as of this time," Tantoco said.
Despite Carrefour’s decision, however, Tantoco expressed confidence that the Rustan Group continues to be a leading retailer even during the economic slowdown.
"Rustan’s has survived through boom and bust times for 50 years and we have no doubt that we will continue to lead and dominate our markets," Tantoco said. According to Tantoco, The Rustan Group was still open to the possibility of entering into a possible partnership with a foreign multinational group to fast tract the development of its businesses.
"While we are cognizant of the expected economic slowdown, we will proceed with our expansion in the past occurred during times of economic difficulties."
The Rustan Group had planned to diversify its high-end retailing business into mass-based retailing, possibly in partnership with French giant retailer Carrefour.
As the retail industry opens to foreign retail operators, local retailers have been scampering to either expand their operations or snag a foreign partner in anticipation of intense competition for a share of one of the biggest retail markets in Asia.
Carrefour, a mass-based French retailer, was restudying the prevailing market conditions to validate its study conducted four years ago on the country’s retailing business.
The Rustan Group’s initial foray into this segment was Shopwise Department Store and Express Lane which was launched last year at the Filinvest Festival Mall in Alabang, Muntinlupa City.