French retailer Casino revealed yesterday that its sales growth slowed in the first quarter of 2014. Continued weakness in Asia and restricted growth in Latin America, particularly Brazil, were the major talking points as foreign exchange moves weighed heavily.
Casino said sales in the first quarter came to €11.3 billion ($15.7 billion), down 3.3% at current exchange rates from the same period a year earlier due notably to the depreciation of the Brazilian Real against the euro.
However, when looking at matters on an organic basis-stripping out currency moves, acquisitions and disposals-sales rose 6.6%, driven by international sales, and notably the expansion in Brazil.
In France, the consolidation of Monoprix boosted results as sales rose 8.3%. Same store sales at Géant hypermarkets have improved and are now stable, while supermarket sales throughout the various brands remained in line with the Q4 trend, reflecting price cuts implemented.
Casino haven't provided any financial targets for 2014 thus far, but in February said it was targeting further growth both home and abroad.
Bruno Monteye, who is a senior analyst for the Wall Street sell-side research firm Bernstein, commented on the results noting that Casino's weak link may be its French discount formats. "But Casino is taking the right steps by taking back franchisee agreements (allowing greater control over store operations) and making appropriate investments in price. We do see a future for discount formats in France, but only if discounters execute well. We expect Casino to focus on these formats for the remainder of 2014 and beyond and that may require additional investment."
© 2014 - European Supermarket Magazine by Enda Dowling
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