Carrefour, the world’s second-largest retailer, said today (19 January) it is reviewing its much-vaunted Planet hypermarket format.
The French retail giant launched Planet in 2010 in a bid to turn around sales at its hypermarkets. Carrefour said then that it would remodel 500 hypermarkets to Planet by 2013. By the end of 2011, Carrefour had 81 Planet stores and investors were openly questioning the strategy.
The retailer said this morning that the roll out of Planet during this year would be “pragmatically reviewed” country by country because of the uncertain economic climate and tightened capital expenditure.
News of Carrefour’s Planet review came as the retailer reported lower fourth-quarter and full-year sales. The retailer also said annual profits would be “at the lower end” of the 15-20% fall it issued in October.
In the last three months of 2011, Carrefour’s sales, excluding fuel but including VAT, fell 0.8% to EUR24.2bn.
Carrefour said food sales were “resilient” but added a “deteriorating environment” impacted non-food trading.
Full-year sales rose 0.5% to EUR91.5bn (US$118bn), which the company said was supported by emerging markets. Sales in the company’s French heartland dropped 2.4%, while sales from the rest of its European operations dropped 4.3%. However, sales jumped 6.8% in Latin America and by 2.8% in Asia.
Chairman and CEO Lars Olofsson said: “Carrefour posted a slight sales growth in 2011 thanks to emerging markets, despite the slowdown in economic growth that has affected more discretionary spending in the fourth quarter.
“In this difficult economic environment, Carrefour concentrates all its efforts on implementing its action plan in France and southern Europe, focusing on a consistent policy of low prices and better targeted promotions.
“At the same time, while increasing its attention on effective management of resources and costs, Carrefour will continue to deploy its multi-channel strategy, expanding its offering of Carrefour brand products and expansion into emerging markets.”
Shares initially jumped today from EUR17.40 to EUR17.80, before falling to EUR16.96 at 11:00 CET.