Carrefour beats expectations in Covid semester

Helped by strong growth figures in Belgium, Spain and Brazil, French hypermarket chain Carrefour ended the first half of the year with results that were better than expected. The group is focusing even more strongly on cost savings in order to increase profitability.

Strong growth for e-commerce

In the second quarter of the year – and thus in the midst of the corona crisis – Carrefour was able to increase comparable sales by 6.3 % to 18.71 billion euros. In May and June in particular, the group performed strongly. The retailer recorded remarkable growth figures in Belgium, where sales went up 15.9 % to 1.19 billion euros. Carrefour was able to take full advantage of the fact that the borders with neighbouring countries remained closed, preventing Belgians from doing their shopping across borders. Market share increased and price investments paid off.

In Europe, Spain also did well (+ 9.8 %), but Italy (- 7.4 %), Poland (- 4.2 %) and Romania (- 2.2 %) deteriorated, partly because the group has many stores in those countries in shopping centres, which remained closed for a longer period of time.

In the French home market, the picture is mixed: as in the first quarter, the hypermarkets had to give way (- 3.6 %) because consumers shopped closer to home. The figures did improve, however, since mid-May. Supermarkets (+ 4.3 %) and especially convenience stores (+ 11.4 %) fared much better. Profitability improved throughout Europe. In Latin America, the retailers also recorded double-digit growth. In Asia (Taiwan) turnover fell slightly, but profitability increased. Also noteworthy is the strong growth of e-commerce in food, which more than doubled.

Joint purchasing pays off

The group paid close attention to costs and managed to save more than 480 million euros in the first half of the year. This is due in part to better cooperation between countries in the field of purchasing, and also to the purchasing alliances with Tesco and Système U. The company is also simplifying its organisational structure. As a result of this good performance, Carrefour feels empowered to further tighten the ambitions of its cost savings plan: the bar will be raised from 2.8 to 3 billion euros by the end of this year.

For CEO Alexandre Bompard, these figures prove the relevance of Carrefour’s multi-format and omni-channel strategy in a time of crisis, after three years of change. He also sees it as an encouragement to further increase environmental commitments and to be even closer to customers.