If the managers of one of Carrefour's hypermarkets in France should ever doubt Jose Luis Duran's commitment to competitive pricing, they need only look at their bonus payment for confirmation.
Since he became chief executive of Carrefour, the world's second biggest retailer, just over a year ago, Mr Duran has vowed not to be beaten on price by rival grocers in its home market.
Store managers now find the size of their bonus partly depends on how well their prices compare with those of rival hypermarket operators, such as Leclerc and Auchan.
"Pricing is something which is not negotiable at Carrefour today," says the 41-year-old. "If somebody [a store manager] has a doubt, a major part of their bonus is linked to the price competitiveness position."
In 2005, this and other measures gave Carrefour a new dynamism in France. By cutting prices - and changing its way of working to ensure they stay low - its market share in food grew 0.6 per cent in 2005, the first time it has posted a full-year gain since 2000.
That growth has come at a heavy cost. Carrefour disclosed yesterday that operating profits fell 16 per cent in France, its biggest market. But for Mr Duran, the pain is an unavoidable part of his strategy to reposition Carrefour both at home and abroad. "It is the price we knew we had to pay."
After a year of restructuring, the first phase of Mr Duran's attempt to accelerate Carrefour's growth is over. Now, having made his mark internally, the forceful Spaniard wants to prove to investors that its shares are undervalued.
Mr Duran first came to prominence as Carrefour's chief financial officer, impressing in that role under Daniel Bernard, the chairman and chief executive who had presided over more than a decade of international expansion.
But then, in early February 2005, Carrefour's lacklustre share price and poor performance in France caught up with Mr Bernard. Mr Duran, a Carrefour employee since 1991, was promoted to chief executive, while Luc Vandevelde, the former head of Marks and Spencer, was made chairman.
A five-person management board was also appointed, consisting of Mr Duran, Jacques Beauchet (head of human resources), Javier Campo (head of the Dia chain of "hard discount" stores), Jose Maria Folache (head of Europe, excluding France) and Guy Yraeta (head) of French hypermarkets). Decision-making is now "more straightforward, more collegial," according to Mr Duran.
In his first year at the helm, the new boss says he has prioritised two things. The first was "to get France right". The second was to reallocate resources to pursue a more aggressive growth agenda, partly by pruning some of the sprawling foreign empire constructed by his predecessor and increasing investment in the more promising territories.
Getting France right has been primarily about pricing. French consumers had been shunning Carrefour hypermarkets in favour of retailers - such as the German discounters, Aldi and Lidl - that better understood the modern tendency for consumers to scrimp on everyday staples in order to splurge on other goods.
After committing the group to a keener pricing policy, Mr Duran claims that few would have expected Carrefour to stick to that strategy to the bitter end. But it has not yet flinched as the 16 per cent profit decline shows. Its prices are now hard to beat and are likely to stay that way, partly because of the greater power given to local store managers to react to rivals.
Mr Duran says the market share gain was important to staff morale, while also improving its standing with suppliers. Internally, he says, "the spirit and motivation is pretty different and we can attack 2006 much better armed".
He also stresses that price cutting has not been the only tool employed during his first year in charge. The assortment of products sold in some hypermarkets has been broadened. Promotions have been tightened up to avoid situations such as the one where too much fish was being sold on deals with "zero gross margin". More dedicated fresh produce managers have been hired to ensure the vital fruit, vegetable, fish and meat aisles get the specialised attention they need. The French loyalty card scheme, begun in 2004, has been refined.
While Carrefour still has work to do persuading more customers to buy things in its "non-food" sections - anything from cooking equipment to garden furniture pricing remains the key issue in France. In 2006, retailers have been given more room to cut the price of branded goods thanks to a relaxation of government legislation protecting smaller outlets. The potential for more discounting has unnerved some analysts.
Mr Duran says he cannot predict whether prices will tumble in 2006, while insisting that "we have already managed the company in a 2005 price war environment". Yet whatever happens, he is confident that, following its "transitional" year in 2005, Carrefour has the scale and the market position to price low, gain share and preserve its level of profitability. "For me there is one main player and its name is Carrefour."
Internationally, during Mr Duran's first year at the helm, Carrefour has shuffled assets. It has withdrawn from places where is it weaker, such as Japan and Mexico, and acquired in markets where it feels it has more potential, such as Brazil and Taiwan. Mr Duran admits that there is potential for further change. In South Korea, Malaysia, Thailand and Switzerland, Carrefour needs to grow faster, he believes.
In spite of the possibility of further withdrawals, yesterday's announcement that Carrefour plans to open 100 hypermarkets a year between 2006 and 2008 shows that there is more organic expansion to come in those international markets where it remains, such as China.
And there is one struggling foreign division in particular that will not be allowed to slip away quietly: Spanish supermarkets. After "five years of losing big money" on this business, Mr Duran believes that the problems have been decisively tackled in 2005 through the closure of nonperforming stores and a rebranding of the rump. "When you have three Spanish guys sitting on the management board, there is no excuse not to get this business unit right," he admits.