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Retail

French Hypermarkets Still Strong - Morgan Stanley

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French Hypermarkets Still Strong - Morgan Stanley

French retail group Carrefour has the ability to protect its market share, due to increasing traffic and frequency, according to industry analysts Morgan Stanley.

The comment was made following February’s flat market share gain for the retailing giant.

In an overall deflationary environment - FMCG prices were down 1.3% in February, according to Nielsen’s latest data - Kantar Retail announced that the average basket size decreased for the month.

The information supports Morgan Stanley’s view that Carrefour’s ongoing EBIT margin expansion is not being achieved at the expense of the top line. "Interestingly, the hypermarket format overall in France had another solid month, with market share gain in February, in line with January," said the analysts.

Regarding the Casino business, both Franprix and Géant gained market share, while Casino Super was flat and Monoprix was down, due to smaller basket size and lower traffic.

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"We believe this recent slowdown might push private players overall - i.e. independents + Auchan - to react more aggressively to recent price investments/promotions at Carrefour and Casino,” said Morgan Stanley.

“We think it likely that competitive pressures will increase in France this year, despite an already very price competitive market.”

© 2014 - European Supermarket Magazine

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