French retail giant Carrefour has stated it will simplify its structure after presenting very weak financial results yesterday. Its share got hammered 13 % on the French stock exchange as the French company said it has no improvement in sight.
New CEO Alexandre Bompard is preparing an enormous transformation plan, which will be presented by the end of the year. He mainly wants the company to become an omnichannel company and requires that its digital transformation speeds up, as French newspaper Les Echos learnt. He also wants to transform the hypermarkets, in order to make them more competitive in an online world. Carrefour’s structure also needs to be simplified, allowing it to react faster to changes in the market.
The changes will be implemented in every one of Carrefour’s market, not only in France. This should also improve the different countries’ and formulas’ synergies.
Carrefour’s latest financials show that the supermarket chain mostly struggles with its profitability. Its turnover may have increased 6.2 % compared to the year before, but its operational margins dropped 1.6 %. Price pressure in France and sizeable losses in Argentina were the main culprits. The board will have to focus on profit margin improvement most of all. However, there is not much improvement in sight for the rest of the year. Turnover should grow 2 to 4 %, below the previous 3 to 5 % forecast.