Carrefour has reported third quarter results saying gross sales rose 1.5%, at constant exchange rates including petrol, to €20.2 bn. Group like-for-like sales, excluding petrol and calendar effects, rose 2.3%. While there were positive elements, with strong growth in Poland supported by a return to like-for-like growth in Spain, these were offset by the retailer’s continuing challenges in France and especially at its hypermarkets in the country.
France suffers from tough comparatives
Total sales in France fell by 3.2% to €9.8 bn, including VAT, while like-for-like sales fell by 0.9%. Carrefour said food sales during the quarter were stable, while non-food sales fell by 6.7% in like-for-like terms, underlining the challenges being faced by the category.
By channel, the retailer said like-for-likes fell by 3.6% at its hypermarkets. The stores’ performance was affected by the strong basis of comparison with Q3 2018, the ‘reduction of promotional intensity, investments in EDLP, development of Carrefour-branded products, reduction of under-productive non-food sales area and discontinuation of certain categories’.
The picture was more positive elsewhere, with like-for-like growth of 1.5% at its supermarkets, which was driven by a ‘good performance over strong comps’ and its convenience stores, where like-for-like sales were up by 2.2%. At the latter it noted the ‘good momentum on already strong comps’, while an expansion plan was ‘well under way’, which was aided by ‘significant achievements in organic and food ecommerce’ which are both strategic priorities.
Better performance in the rest of Europe
Total sales were up by 0.5% to €5.8 bn, with like-for-like sales up by 0.4% across its five other European markets. The retailer said the performance was the ‘best like-for-like growth since the launch of the Carrefour 2022 plan’.
While Poland stood out in numerical terms, with like-for-like sales rising by 6.2%, due to a ‘strong customer focus’, it was the retailer’s return to like-for-like growth in Spain, where it registered a 1.5% increase, that is the most pleasing for it. Carrefour said the rise in like-for-like sales in Spain, ‘reflected the strong focus on customer satisfaction’.
Elsewhere Carrefour saw ‘continued growth’ in Romania, where like-for-like sales were up by 2.8%, while there were continuing challenges in Belgium, like-for-likes fell 2.8%, and Italy, where like-for-like sales contracted by 2.3%. Carrefour described the latter two countries as being difficult and declining markets.
Continuing strong momentum in Latin America
In Latin America Carrefour reported total sales were up by 12.8% in like-for-like terms, with its operations in Brazil seeing like-for-like growth of 3.8% and in Argentina the growth, in the same terms, was up by 58.7%.
In Brazil, Carrefour said its hypermarkets and supermarkets had enjoyed their ‘highest quarterly like-for-like growth in the last five years’, at +8.8%. The retailer said the performance had been driven by the ‘successful repositioning of hypermarkets, strong performance of convenience, ecommerce and non-food’. At its Atacadão banner it reported total sales rose 9.0%, with a strong contribution from openings, while like-for-likes remained robust, rising by 1.8% ‘despite inflation slowdown, especially in agricultural commodities’.
Results see Carrefour confirm short term ambitions
As part of its third quarter results, Carrefour reiterated its operational and financial targets. Operationally it said it aimed to:
- Reduce the size of its hypermarkets by 350,000 sq. m worldwide by 2022
- Reduce its assortments by 15% by 2020
- Have Carrefour-branded products accounting for one-third of sales in 2022
- Open 2,700 convenience stores by 2022
Financially Carrefour said it was looking to:
- €2.6bn cost reduction plan on an annual basis by 2020
- €4.2bn of food ecommerce sales in 2022
- €4.8bn sales in organic products in 2022