Carrefour picks retail veteran Plassat as new boss

Recruiting Plassat would send "a strong signal to employees, suppliers and investors. It would also help to put an end to the rumors of a spin-off affecting the retailer," CM-CIC analyst Christian Devismes said in a recent note.

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Carrefour, the world's second-biggest retailer behind U.S. group Wal-Mart , has been struggling for years, partly due to its reliance on hypermarkets, which have been losing out as time-pressed shoppers buy more goods locally and online, and prefer to purchase general merchandise from specialist stores.

Olofsson's main response to the challenge was Carrefour Planet, a costly revamp of the stores that has so far not yielded the necessary results and is likely to be scaled down in March amid a worsening economic climate.

A new CEO might pursue an alternative strategy for the hypermarkets, like downsizing them, slashing prices to lure back cash-strapped shoppers who think that Carrefour products are too expensive and investing more in e-commerce, analysts said.

However, some think Plassat faces an uphill struggle and giant stores are out of touch in a world where you need to give shoppers a good reason to make that out of town trip.

"Carrefour's business model is inherently flawed given its over dependence on a dated format and slow-growth markets and a simple change at the helm will not be enough to save the company," said Natalie Berg, director of global research at Planet Retail.

She expects Plassat to "pull the plug" at least temporarily on the costly Carrefour Planet hypermarket revamp to assess "how Carrefour can make a profitable and sustainable comeback."

Carrefour shares, which rose last week on talk of Plassat's appointment, were down 1 percent at 19.08 euros by 3:05 a.m. ET.

THE TASK AHEAD

Plassat will join Carrefour on April 2 in the transitional role of chief operating officer, before being appointed CEO at the company's June 18 shareholders meeting, the company said.