Carrefour Exits Italy: €1 Billion Sale to NewPrinces Signals Strategic Shift in European Retail

Strategic Motivations Behind the Transaction

Carrefour’s Exit: Refocusing on Profitability

Carrefour’s Italian operations had become a drag on performance, with recurring operating income of €67 million and negative free cash flow of €180 million in 2024[1][2][15]. The sale aligns with CEO Alexandre Bompard’s strategy to prioritize markets where the retailer holds strong positions, such as France, Spain, and Brazil, where Q2 2025 saw 4.4% comparable sales growth[8][15]. The transaction is expected to improve Carrefour’s operating margin and recurring cash generation[1][6].

NewPrinces’ Vertical Integration Play

NewPrinces, rebranded from Newlat Food in April 2025 after acquiring UK-based Princes Group, views the deal as a “decisive step” toward integrating production and distribution[3][5][9]. The acquisition enables synergies between its manufacturing capabilities (e.g., pasta, dairy, canned goods) and Carrefour’s retail network, allowing for tighter control over supply chains and enhanced brand visibility[5][6][12]. Post-acquisition, NewPrinces will become Italy’s second-largest food group by revenue and the largest employer in the sector[4][12].

Market Implications and Competitive Landscape

The deal raises questions about the future of late-night shopping in Italy, as Carrefour’s convenience stores were often the last option for tourists and urban shoppers[4][13]. However, NewPrinces plans to relaunch the GS brand—a former supermarket chain acquired by Carrefour—after modernizing stores and integrating home delivery logistics[6][12]. This revival could challenge competitors like Esselunga and Conad, particularly if NewPrinces leverages its private-label expertise to undercut rivals[4][6].

NewPrinces’ Growth Trajectory

From Regional Player to Pan-European Giant

NewPrinces’ ascent began with Angelo Mastrolia’s acquisition of a small milk business in Salerno, evolving through strategic acquisitions. Key milestones include:

• 2019: Acquired Newlat from Parmalat for €1
• 2024: Purchased UK’s Princes Group for £700 million, triggering rebranding
• 2025: Acquired Diageo’s Italian operations and Kraft Heinz’s Plasmon brand

Post-Carrefour acquisition, NewPrinces projects €7 billion in revenue by 2026, driven by expanded distribution channels and cross-selling opportunities[9][10].

Carrefour’s Global Strategy: Lessons from Italy

While Carrefour’s Italian exit reflects challenges in fragmented markets, its Q2 2025 results highlight resilience elsewhere. France saw 2.1% comparable sales growth, Spain and Belgium performed strongly, and Brazil remained a growth engine[2][8][15]. However, profitability pressures persist, with H1 2025 operating margins declining to 1.6%[8][15]. The sale of non-core assets like Italy could free capital for digital transformation and price competitiveness in key markets.

Conclusion: A New Era for Italian Retail

The Carrefour-NewPrinces deal marks a turning point in Italy’s retail sector, blending manufacturing prowess with distribution scale. For NewPrinces, success hinges on executing its vertical integration strategy and reviving the GS brand. Carrefour, meanwhile, must demonstrate that its focus on core markets yields sustainable profitability. As the transaction closes by Q3 2025, stakeholders will watch closely to see if this €1 billion bet pays off in Europe’s evolving retail landscape.