End of year period was no party for Carrefour

The hypermarkets continue to affect French retail group Carrefour: sales in France, Italy and Belgium continued to fall in the fourth quarter. However, there are also some bright spots: Latin America, Poland and Romania save the furniture, profitability improves and the transformation plan is on track.

Strikes and price investments

In the crucial fourth quarter of 2019, comparable sales at Carrefour rose by 3.1% to 21.7 billion euro. For the full year, there was also comparable growth of 3.1%: sales amounted to 80.7 billion euro. But behind that positive figure we see conflicting trends. On the French home market, sales fell 2.4% in the fourth quarter, mainly as a result of weak performance of the hypermarkets (-3.4%). Strikes did not boost sales. Supermarkets and convenience stores did grow.
 

In Belgium, comparable sales declined by 1.1% to 1.1 billion euro in the fourth quarter. For the full year, sales amounted to 4.2 billion euro, down 1.5%. The market remains difficult, says the retailer, who also points to the price cuts implemented by Carrefour in November. Food transition initiatives are positive, however, according to the press release: the development of organic, local and private label products is showing good results. It has just been announced that a new but familiar name should put the retailer in Belgium back on track: it is François-Melchior de Polignac, who was also CEO between 2013 and 2017.

Growth for e-commerce

In the rest of Europe, Italy keep struggling, with a comparable 2.6% decline in turnover for the full year, while Spain (+0.1%) is picking up and the Eastern European countries Poland (+4.9%) and Romania (+3.6%) are posting good growth figures. However, Brazil (+10.4%) and Argentina (+52.3%) in particular give the figures more colour.
 

The retailer emphasises that e-commerce turnover in food increased by more than 30%, and profitability at group level improved significantly. Top executive Alexandre Bompard describes 2019 as an important milestone for the group: “Our transformation plan is bearing fruit. The numerous initiatives in the areas of food transition, e-commerce and competitiveness are perceived positively by our customers and confirm the relevance of our omnichannel model.”