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France-based Leclerc said its sales (including VAT but excluding petrol) increased by 1.5% to €37.75bn in its 2018 financial year. The retailer said its Drive stores underpinned performance, with its grocery-focused bricks and mortar sites showing limited growth in sales.

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We look at how Carrefour is investing in its organic ranges and offer in France and Poland as it rolls out its Act for Food initiative.

France: co-creates organic crowdfunding project

Carrefour France has joined with other food companies to launch ‘MiiMOSA Transition’, a crowdfunding project that will support farmers as they switch to organic production methods. Food group Herta and cooperatives d’Aucy and Les Paysans de Rougeline are also involved in the project. They will help producers adapt their farming, livestock rearing and crop-growing practices.

The partners will initially help fund €10m (US$11.4m) worth of projects. The aim of project is to reach €100m (US$114m) within four years, after other partners have joined.

The crowdfunding project is in line with Carrefour’s Act for Food initiative. The retailer has also adopted blockchain technology to trace chicken, eggs and tomatoes. It hopes to generate €5bn in organic food sales by 2022, after achieving €1.8bn in 2018.

Poland: launches ‘Little Farmer’ zones for children

Meanwhile in Poland, Carrefour has launched ‘Little Farmer’ zones in select stores, which offer organic products for children. The product range comprises over 60 SKUS including cereals, desserts, pasta, snacks and sweets. There are also gluten-free and products for diabetics in the range.

The ‘Little Farmer’ zones are part of Carrefour’s ‘Healthy Shelf’ project and the Act for Food initiative. They aim to bring together all the retailer’s healthy, organic products for children in one area. Carrefour hopes to expand its Carrefour BIO and vegan range and discontinue caged eggs by 2025.

The zones are initially available in Carrefour stores in the Arkadia shopping centre, Reduta, Targówek and Galeria Wilenska in Warsaw, as well as in selected stores in Kraków, Gdansk and Torun. The retailer hopes to roll out the project to areas in Wroclaw and extend the product range it covers, although without giving a timeframe.

For subscribers wanting more on how retailers are executing organic in-store, see our insight presentation.

France-based Carrefour said total sales, at constant exchange rates and including VAT, fell by 0.8% (excluding various accounting changes) in the fourth quarter to €23.0bn. A better than expected result in France, where like-for-likes fell by only 0.1%, was aided by its performance in Latin America, but hindered by continued weakness in Europe, excluding France, and Asia.

France: hypermarkets’ performance offset by other channels

In its home market Carrefour said total sales rose 0.5% to €10.6bn, with total sales falling by 0.5% at its hypermarkets, but rising by 1.0% at its supermarkets and by 3.3% at its Other formats. In like-for-like terms this saw Carrefour see a fall of only 0.1% in France, with the 2.2% contraction at its hypermarkets balanced by a 1.9% rise at its supermarkets and 3.1% increase at its Other formats.

Carrefour said the ‘yellow vest’ protests had hit its hypermarkets and non-food sales the hardest. However, at a channel level this had had a positive effect on its other store formats, while it had seen a ‘good performance in food’, where it saw a ‘stable’ performance at its hypermarkets and ‘significant growth’ in other formats. At a category level, Carrefour said it had seen ‘growth momentum of organic products and e-commerce’.

Belgium and Italy limit progress elsewhere in Europe

At a European level total sales fell by 0.9% to €6.4bn, at constant exchange rates, and by 1.7% in like-for-like terms, excluding the petrol and calendar effects. Carrefour said total sales rose in three countries, Poland, Romania and Spain, while they fell in Belgium and Italy. However, in like-for-like terms sales also fell in Spain, underlining the boost given by its acquisition of Eroski stores in the country.

Across several countries Carrefour noted the continued competitive environment that existed, while it said that consumption had come under pressure in a couple. Turning around its performance in Belgium, Italy and Spain is likely to be challenging in 2019 given the market environment in the three countries and the continued expansion of leading rivals in them all.

While the positive performance of its operations in Poland and Romania will be welcomed by the retailer, they are by far its smallest markets in terms of revenue in Europe. As such, the market outperformance in Poland and success of Supeco in Romania are positive, but will not change the dial at a regional level for the retailer.

Latin America continues to benefit from strength of Atacadão format

The 12.9% increase in like-for-like sales in Latin America was underpinned by the growth of sales at its Atacadão format in Brazil and an acceleration of growth in Argentina. For more on the retailer’s performance in Brazil, read our story here. The like-for-like performance in Brazil, where total sales rose 10.2% in local currency terms, was driven by a 7.4% increase in like-for-like sales at Atacadão and an accelerated pace of store openings.

China continues to hold back performance in Asia

In local currency terms, total sales fell by 6.2% in Asia. The 8.9% fall in China was partially offset by a 0.2% increase in Taiwan. In China it saw a 6.2% fall in like-for-like terms, continuing a challenging performance in the country. Carrefour said recent strategic initiatives were taking effect, supporting ‘solid growth of e-commerce’ and leading to an ‘adaptation of [its] commercial model’.

For subscribers wanting to see how these changes are being activated in-store, see our visit to Carrefour Le Marche in Shanghai.

Results see Carrefour confirm group targets

The retailer said its Q4 results showed the positive effect of its 2022 transformation plan and the steps taken as part of this to improve its performance. As a result, Carrefour said it was able to confirm the main parts of its financial targets:

  • A cost reduction plan of €2bn by 2020 on full-year basis;
  • The disposal of non-strategic assets for €500m by 2020;
  • €5bn food e-commerce sales in 2022;
  • €5bn of organic products in 2022.

We round up the latest news from Carrefour Poland. The retailer has formed partnerships with petrol station operators and shopping channel Szopi.pl to extend its reach. Separately, Carrefour is rolling out self-service checkouts to its franchise convenience stores.

Carrefour partners with petrol station operators…

In September 2018, Carrefour launched a new franchise store concept for owners of petrol stations. Since then, it has established several partnerships and opened 24 stores across the country. Pit Stop, Petrotrans and Wasbruk are among the petrol station operators working with Carrefour.

The new franchise store concept combines the benefits of a grocery store and a petrol station store. The stores are open every day of the year and offer a wide assortment. They also provide convenience and quick access to products for customers on-the-go. All elements of the new concept are adapted to the size of the petrol station and its location.

…And Polish shopping website Szopi.pl

Meanwhile, Carrefour has partnered with the Polish shopping website Szopi.pl. As part of the partnership, thousands of Carrefour products are listed on the site with identical prices and promotions to those available instore.

Customers can purchase Carrefour’s products and request home delivery via the Szopi.pl website. Orders are picked in the nearest store and then delivered to the recipient’s home within two hours. The service is currently only available in Warsaw. However, the companies hope to extend the agreement to new locations soon.

Michal Sacha, marketing, digital, IT, ecommerce and financial services director at Carrefour Polska, commented, “Carrefour's ambition is to offer innovative services that respond to the real needs, expectations and lifestyles of modern customers. Cooperation with Szopi.pl is another step in the dynamics of the network's offer…”.

…As it launches self-service checkouts

Separately, Carrefour has introduced self-service checkouts to its franchise convenience stores. After conducting trials, the checkouts have been rolled out to selected Carrefour Express stores in Warsaw and Gdansk. Carrefour hopes to introduce the self-service checkouts to an additional 20 locations in 2019.

The retailer wanted to introduce the self-service checkouts to stores situated in fast-paced, big cities. Michal Florkiewicz, director of convenience stores at Carrefour Polska, explained, “Self-service cash desks…are an unrivalled solution in the convenience segment, which allows you to unload queues during rush hour and provides customers with even more convenience in everyday shopping”.

Want to understand Poland’s outlook and its place versus other European markets, subscribers can see our insight presentation on Europe grocery retail market sizes 2018 – 2023.

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