Carrefour, the world’s second-largest food retailer, said it was unhappy with the results in its French market today (28 August) but said it will not change its goals or its strategy.
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The company’s first-half sales in France were down 0.6% excluding petrol, although the retailer managed to gain market share.
However, like-for-like hypermarket sales excluding petrol were also down 1.9%, despite the rollout of the Carrefour Market brand.
Chief executive Lars Olofsson (pictured) told a news conference that the market would continue to be “challenging” and the second half would be similar to the first.
“Figures for the period of July, the market shares for hypermarkets in France were weak. I wasn’t happy but I am confident we will find the answer to get back on track. We lost some shares in July but we gained some shares in supermarkets,” Olofsson said. “We will wait and listen. We are not expanding investments as others do.”
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By GlobalDataOlofsson said the key will be to “analyse” competitors. “Competitors have been more aggressive, we haven’t had the expansion like many others, we have put a lot of pricing efforts in. We will see what is coming from our competitors and see if we need to change anything for the second-half. We are not changing our goals, and we are not changing our strategy.”
The French retail giant this morning stuck to its forecast of an up to 18% fall in annual profits after seeing half-year earnings slump.
For the six months to the end of June, operating profit tumbled 28% to EUR1.01bn (US$1.45bn) and Carrefour said annual operating profit would reach EUR2.7-2.8bn – equating to a fall of up to 18%.
Turnover fell 1.6% to EUR41.28bn but underlying sales – excluding fuel and adjusted for calendar effects – were up 1.9%.
Neverthless, Olofsson insisted the retailer had put in a “resilient” performance.
“There is no new elements today that incite me to go and change either our forecast or the visions of how the market will evolve,” he told analysts. “I think we will continue to have a challenging market and what we saw in the first semester is what we will see in the second semester.
“It would be easy to put on a little bit of expansion to gain market share but we have shown what we are capable of in the first semester and we will do the same in the second,” he added.
Olofsson said the company was encouraged by the leveraging of the Carrefour brand and announced plans to convert up to another 142 stores to the Carrefour Market banner by the end of the year, bringing the total to 900.
“Its is clearly not only the banner change, but the change that has been put into the stores is clearly driving our market share. This is one of the reasons why we can today very successfully confirm that we have gained on the first-half of the year 0.3 percentage points in France. The way in which it has been done is enriching our Carrefour brand.”
Olofsson added that Carrefour’s priorities for the second-half would be a EUR600m investment to support sales and marketing, EUR500m in cost reductions a “new global communication platform” to support the group’s transformation programme, entitled: “The positive is back – le positif est de retour”.
