Carrefour’s quarterly results illustrate the major challenges the current CEO and his team face, especially in Western Europe. Belgian like-for-like turnover also dropped.
French hypermarkets struggle
Alexandre Bompard knows what he has to do: he has to revitalize the struggling French hypermarkets and kick the French retail group’s digitization into a higher gear. That has become even more poignant with rumours that Amazon is circling to acquire the chain. The third quarter results were largely as expected, but expectations were not too high anyway.
With a 21.859 billion euro turnover, a 1.9 % growth (if exchange rate fluctuations are ignored) and a 0.5 % like-for-like turnover growth, Carrefour published mixed results. France, with a 1.3 % turnover drop, is still worrisome: it suffered price drops in fruit and vegetables, unfavourable weather and calendar shifts. The chain’s hypermarkets are in particularly troubled waters (- 1.7 % like-for-like turnover), partially because a major birthday campaign for 2017 started three weeks later than it did in 2016. French supermarkets also face like-for-like turnover slumps (- 1.2 %), but the convenience stores and other formulas still posted growth, at 2.2 %.
Belgium also suffers
Belgian turnover was 1.059 billion euro, down 0.5 % on a like-for-like basis. The retailer blames the huge promotional pressure. Italian and Spanish like-for-like turnover also dropped 0.5 % and 0.3 % respectively, although the remodeled Eroski stores did perform well. Poland and Romania were two excellent markets (up 4.4 % and 9.2 % respectively).
Everything fared better in Latin America: Brazilian turnover grew 5.3 %, partially through better non-food sales. Argentina published a 17.4 % turnover increase. China limited its slump to – 4.6 % and Taiwan grew 0.9 %.
Carrefour now targets a 2 to 4 % full-year turnover growth. The new board will present the outlines of its transformation plan by the end of the year.