French retailer Carrefour has posted its fifth consecutive year of like-for-like sales growth as revenues rose in its key European and Brazilian markets, offsetting the continuing struggles at its lossmaking Asian business.
The world’s second-largest retailer by revenues said on Thursday that like-for-like sales excluding petrol rose 2.9 per cent to €23.4bn in the fourth quarter of 2016, slightly above analyst expectations of €23.24bn. This helped nudge full-year sales up 3 per cent to €85.7bn.
“Overall in the fourth quarter and the full year Carrefour posted good sales growth,” Pierre-Jean Sivignon, chief financial officer, said on a call with analysts. “There’s strong sales momentum in Europe, another excellent performance in Latin America, and in Asia, a sequential improvement in China.”
Under Georges Plassat, who joined the group as chief executive in 2012, Carrefour has undergone a “back to basics” turnround plan. It has involved pulling out of several emerging markets, giving more power to regional store managers and in 2014 introducing a global multi-store programme so that every country it operates in has hypermarkets, supermarkets, convenience stores and wholesalers. As part of this strategy, it opened more convenience stores in Brazil, Spain, Poland and China in 2016.
Carrefour said on Thursday that its multi-format model was gaining momentum. For example, in its domestic market of France, shoppers using several Carrefour formats now represent two-thirds of sales and half of the total client base.
Despite this, the French market continued to be challenging and its hypermarkets division — which is grappling with increased competition from online rivals and aggressive price discounting — was down 1.5 per cent last year. Overall in France like-for-like sales were 0.7 per cent higher in the quarter and 0.3 per cent for the full year.
In Brazil, Carrefour’s second-largest market, like-for-like sales increased 9 per cent during the fourth quarter and 11 per cent for the full year. Its China division continued to suffer; like-for-like revenues were down 5.4 per cent in the fourth quarter and 7.8 per cent lower for the full year.
Analysts have questioned whether it makes sense for Carrefour to retain a presence in China, where it has been affected by a slowdown in economic growth and intense competition from local rivals and e-commerce. Mr Sivignon said Carrefour was committed to China: “We have to be patient. We’ll absolutely stay the course in that particular country.”
Carrefour has been trying to improve its online offering and this month completed the acquisition of Rue de Commerce, a non-food e-commerce business. Mr Sivignon said that the retailer would press ahead with plans to float its Brazilian division and Carmila shopping centres unit later this year, but declined to give more details.
Carrefour’s share price dipped 2.2 per cent to €22.6 in early trading in Paris.
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