Carrefour sales soar
PARIS: World No. 2 retailer Carrefour SA said sales growth accelerated in the fourth quarter, reflecting an improved performance in Europe and buoyant growth in Brazil, its largest market after France.
Trading conditions remained weak in China, however, amid slowing consumption, the company said yesterday.
Europe’s largest retailer added that its 2014 recurring operating income would be in line with the expected €2.38 billion ($2.77 billion).
“Carrefour’s strong performance shows that action plans are beginning to bear fruit, and it demonstrates that Carrefour has durably improved its fundamentals,” chief financial officer Pierre-Jean Sivignon told a conference call.
Carrefour, which makes 73% of its sales in Europe, has suffered from a reliance on the hypermarket format it pioneered now that customers favour more local and online shopping.
In response, chief executive Georges Plassat has lowered costs, revamped stores, cut prices, simplified product offerings and given more autonomy to store managers, starting in France, where the group makes 47% of sales.
Fourth-quarter sales were €22.6 billion ($26.3 billion), above the average forecast of €22.47 billion in a Reuters poll of analysts. Stripping out fuel, currencies and calendar effects, revenue grew 4.1% year-on-year, an acceleration from 2.8% growth in the third quarter.
Carrefour’s performance contrasts with the difficulties at British rival Tesco Plc, which is reeling from an accounting scandal and a downturn in trading that has shaken investor confidence and is forcing the retailer to cut costs and sell assets.
Overall sales grew 0.4% in Europe, excluding France. Sivignon said the trend in the region was stabilising for the first time in six years.
In austerity-hit Southern Europe, sales in Spain rose 0.9%, benefiting from improving consumer spending, while trends also improved in Italy.
In France, sales rose 1% like-forlike. Revenue at Carrefour’s domestic hypermarkets declined 0.6% after falling 0.2% in the third quarter.
Supermarkets performed better, posting a 2.6% rise, while sales at Carrefour’s convenience stores grew 6.8% like-for-like in the quarter.
Like-for-like sales growth in Brazil, an emerging market Carrefour has earmarked for expansion, rose 10.4%, an acceleration from 7.7% growth in the third quarter.
Carrefour sold a 10% stake in its Brazilian business to billionaire Abilio Diniz last month, a step towards a possible separate listing as it looks to raise cash to accelerate growth in its secondlargest market.