Carrefour's sales growth slowed in the first quarter amid continued weakness in its core French market, reminding investors that the road to recovery for the supermarket retailer would be long.
Carrefour, which is Europe's largest retailer, said that sales at its French hypermarkets turned negative again, amid bad weather conditions, further stiff competition from traditional and online rivals, and strikes during the Easter holiday.
First-quarter sales reached €20.776 billion – slightly below the median analysts' estimates for sales of €20.869 billion, in a poll for Reuters compiled by Inquiry Financial.
Growth slowed to 0.4% on a like-for-like basis excluding fuel and calendar effects, from 1.9% in the fourth quarter of 2017.
'Competitive Environment'
In its home market of France, sales were down by 0.1% on a like-for-like basis (+0.9% overall), in what Carrefour noted was a 'persistently competitive environment'. While its supermarkets and convenience operations posted like-for-like sales growth, its hypermarket business was 'affected by adverse weather conditions and operational disruptions'.
In its Q1 statement, Carrefour said that the period saw the commencement of the Carrefour 2022 operational transformation plan, with work under way to transform the business in France, Belgium and Argentina, 'positive momentum' being made on direct and indirect purchasing, and 'advanced discussions' under way regarding the removal of 273 former DIA stores from the group's portfolio.
In terms of furthering its omnichannel offering, it noted that it was instigating the 'rapid expansion' of home delivery in France, opening new Drive outlets, and furthering efforts to create a single Carrefour.fr website. It also recently launched a new digital payment solution, Carrefour Pay.
In January, Carrefour unveiled plans to cut costs and jobs, boost e-commerce investment, and seek a partnership in China with Tencent in a bid to boost profits and revenues and help it tackle competition from Amazon.
News by Reuters, edited by ESM. Additional reporting by Stephen Wynne-Jones. Click subscribe to sign up to ESM: European Supermarket Magazine.
