Carrefour looks back on difficult year

Despite a fourth quarter improvement, French Carrefour has been through a very difficult year. Next week, CEO Alexandre Bompard is expected to set out new guidelines in order to give the retail giant’s results a new push.

Weak results

In its full fiscal year 2017, the retailer generated an 88.2 billion euro turnover, with only a 1.6 % like-for-like growth compared to 3 % in 2016. Operational profit is forecast to be about 2 billion euro, down 15 %. According to Carrefour, these weak results are because of sluggish food sales, mainly in the second part of the year. Non-food turnover did grow however. The retailer faces local pressure in France and its distribution and investment costs are only growing.

Nevertheless, there was a slight improvement in the fourth quarter, when there was a 1.9 % like-for-like growth. The chain took full advantage of a successful Black Friday and decent holiday season in France. Spain and Italy continue to struggle, but Poland and (mainly) Romania grew a lot. Belgium published a 0.8 % like-for-like fourth quarter turnover growth to 1.2 billion euro. For its full fiscal year, turnover only grew 0.3 % to 4.4 billion euro.

CEO Alexandre Bompard will present his transformation plan on Tuesday 23 January and he will most likely put an emphasis on enlarged eCommerce activities. The retailer just announced it will acquire a 17 % minority stake in flash sale provider Showroomprivé. Other possible measures: Sunday openings for hypermarkets, more franchisees, an increased collaboration with Fnac Darty, closure of onerous stores and a simplification of the company structure, which may lead to job cuts at its main office. Belgian labour unions and employees are also carefully awaiting the full reveal of Bompard’s transformation plan.