Carrefour has announced that it is halting conversions of its new Carrefour Planet hypermarkets after 2012 as its results were short of expectations. Net profits at the Group fell by 14 per cent to €371 million in 2011. With its net sales being helped by growth in emerging markets, net sales still only rose by one per cent to €81.3 billion.
"Despite reporting overall sales growth, driven by its buoyant emerging market operations, there is no denying that the group's overall performance has been brought down by its exposure to the underlying weakness of its core European market,” said Conlumino analyst Neil Saunders. “Efforts to improve its hyper division have been hampered by the severely challenging macroeconomic conditions in the euro zone, which has led to a significant deterioration in non-food sales, especially in the second half of last year." Analyst expectations of average sales of €91.5 billion might not be easy to reach, said the retailer. The reasons for this included Europe’s economic crisis, slow growth in Europe and unemployment figures of almost 24 million European citizens. With more people looking for bargains in their weekly shop, Carrefour must respond to customers with lower prices, which will lead to lower revenue.
“In 2012, we will capitalise on our strengths while exercising strict cost and cash discipline to adjust to the environment in which we are operating,” said Carrefour Chief Executive Lars Olofsson. “Carrefour will continue implementing its Reset Plan in France as well as local action plans in southern Europe, aiming at consistent lower prices, more targeted promotions, and a considerably enhanced Carrefour-branded product offer.” (12 Mar)
© 2012 ESM: European Supermarket Magazine
