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French retail group Carrefour saw both sales and profits improve in 2021, mainly thanks to a strong performance in France. In Belgium, however, the retailer has suffered from logistical problems.
Armed against inflation
Despite the partial easing of Covid measures for the hospitality industry, food retail keeps the wind in its sails. After Ahold Delhaize published a good report on Wednesday morning, Carrefour also published strong results: comparable sales increased by 2.3 % in its financial year 2021, to 81.2 billion euros. Operating profit rose by 7.7 %, and that after an already very successful 2020.
For CEO Alexandre Bompard, the good figures confirm the soundness of his strategic plan. The retailer gains market share in all core countries and the digital strategy also bears fruit: online food sales grew by more than 20 %. Carrefour reaches its target for opening convenience stores a year earlier than planned. The cost-cutting plan yielded 930 million euros in 2021, and by 2023 the company wants to have saved a total of 2.7 billion euros. This way, the group is well armed against rising inflation.
Problems in Belgium
On the French home market, the retailer is showing growth in all segments. Market share gained two basis points, e-commerce advanced by 19 % (18 % in food). Carrefour also sees improvement in the other European countries. Profitability improves in all countries, except in Belgium, where comparable sales declined by 4.2 % for the full year – and even by 6.8 % in the fourth quarter.
Over the past two years, the performance in Belgium remains solid, with comparable growth of 4.1 %, Carrefour stresses. The decline in the second half of the year is mainly due to severe logistical problems at a subcontractor. With that, the retailer refers to the strikes at Kuehne+Nagel, which wants to close its distribution centre in Nivelles. Since the end of September, the retailer has been struggling with empty shelves, and so far not all supply problems have been solved. Furthermore, the largest franchisee in Belgium is not doing well either: Groupe Mestdagh is ending its exclusive partnership with Carrefour by 2023 after restructuring efforts failed to yield sufficient results.
