A source close to the matter said on Tuesday, Carrefour intends to drop a plan to open a luxury food shop on the chic Place de la Madeleine in Paris.
Separately, Hediard, the French chain of luxury food shops whose flagship Paris store sits on the same square, filed on Monday for insolvency, a source familiar with the process said. He declined to be identified because of legal restrictions.
Carrefour's luxury plan, the brainchild of former head Lars Olofsson and announced in 2011, contrasts with the main cut-price strategy of Europe's largest retailer to revive its ailing French operations.
Carrefour and Hediard declined to comment on Tuesday.
Carrefour has struggled for years in France, partly due to a reliance on the hypermarket format it pioneered whereas time-pressed customers are shopping more locally and online, and buying non-food goods from specialist stores.
Chief Executive Georges Plassat, who replaced Olofsson in May 2012, has responded in France, which makes 40 percent of group sales, by cutting costs, revamping stores, improving price competitiveness, simplifying product offerings and giving more autonomy to store managers.
In recent months, Carrefour officials have reported an improvement in the group's price image and store footfall.
Meanwhile a hearing is due to take place on Thursday at the Paris commercial court to determine whether an administrator should be appointed for Hediard, the source familiar with the matter said late on Monday.
