ALMATY, MAY 30 2017 (The Bulletin) — French hypermarket chain Carrefour will close its only store in Kazakhstan barely 15 months after opening, because the economy simply couldn’t support it.

The decision will be a personal embarrassment to Kazakh President Nursultan Nazarbayev who toured the hypermarket based in a shopping mall on the outskirts of Almaty when it opened in February 2016.

Seung Dae-Ryu, director of Carre- four in Kazakhstan, said the main reason for closing was the devaluation of the tenge and competition.

“The closure of the store does not mean that Majid Al Futtaim Hypermarkets Kazakhstan company is moving out of the country. The company will keep monitoring the economic situation in the republic and does not exclude the possibility of coming back into the market in future,” he was quoted by media as saying.

Carrefour is operated as a franchise in Kazakhstan by Dubai-based Majid Al Futtaim. It said in 2016 that it would open up to nine Carrefour hypermarkets in Kazakhstan.

Kazakhstan’s economy is recovering, slowly. A collapse in oil prices in 2014 and a recession in Russia stalled economic growth and halved the value of the tenge. Inflation has risen and people’s real incomes have fallen.

Over the past three years Western brands delayed plans to invest in Kazakhstan and the wider region, making the Carrefour entrance in 2016 a rarity. US coffee chain Starbucks opened its first store, as did the Swedish fashion house H+M, but there was little other cheer.

Mr Nazarbayev seized on the Carrefour opening as a PR opportunity, touring the shop, talking to staff and customers. He was upbeat.

It was a far more downbeat scene at the Grand Park Mall, when The Bulletin visited this week. Workers’ wearing the Carrefour blue uniform cut a despondent sight.

“Carrefour is closing and another supermarket is coming here. We will all be fired, I do not know if the new supermarket will give us a job,” one said, declining to be named. Unemployment is difficult to measure but it is clear that there has been a significant increase since 2014.

And customers were frustrated too. Natalya, 35, said that she regularly shopped at Carrefour as she enjoyed its wide choice of products.

“It is sad that it’s closing. It was very comfortable for me,” she said.

Turkish chain Ramstor dominates the supermarket sector in Kazakhstan. European firms have said Kazakhstan’s size and its relative isolation make operating there expensive.

For Mr Nazarbayev, the closure of the Carrefour hypermarket also makes for painful comparisons with Kazakhstan’s neighbours. Last year, Majid Al Futtaim said it would open its third Carrefour hypermarket in Georgia. It also operates one in both Armenia and Tajikistan.

ENDS

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(News report from Issue No. 331, published on June 5 2017)