A major store refurbishment programme, coupled with strong performances in its cash-and-carry operations, has helped to lift sales at Carrefour's operations in Brazil.
Grupo Carrefour Brasil reported gross sales of R$13.6 billion (€3.40 billion, excluding petrol) in Q4 2017 (+5.3% year on year) and full-year sales of R$49.7 billion FY (€12.4 billion) – an increase of 7.2%.
It said that around 3.0% of this increase was as a result of improvements in like-for-like sales, with the remainder a result of the expansion of the group's sales area.
Like-for-like sales were up 1.4% in the fourth quarter of the year across the group, however, its retail arm saw sales dip slightly in the fourth quarter.
Carrefour isn't the only international retailer investing in operations in Brazil, with Walmart also recently announcing a store refurbishment programme.
Divisional Performance
Carrefour Brazil's retail operations posted gross sales of R$4.32 billion in the fourth quarter (+1.8%) and R$15.56 billion for the full year (+5.6%), with like-for-like sales of -0.1% and 1.8%, respectively.
Gross sales at cash-and-carry unit Atacadão were R$9.30 billion in Q4 – a 2.2% increase in like-for-like terms, and a 7.0% increase overall. Full-year sales at the cash-and-carry business were R$34.08 billion – a 3.6% like-for-like increase and an 8.0% increase overall.
E-commerce sales accounted for about 5% of sales in Q4 and 3.5% thereof in full-year 2017, compared with less than 3% and 1%, respectively, a year ago.
In October, Carrefour Brasil announced the expansion of its e-commerce portfolio with a food platform, initially available in the city of São Paulo.
Additionally, Carrefour continued to roll out its convenience format – 49 Express stores opened during the full year, bringing the total of c-stores that the company operates in the country to 119.
In December 2017, the first 'compact supermarket' store under the Carrefour Market banner was opened, in a high-income neighbourhood in São Paulo. The store is approximately 500 square metres in size and offers 7,000 SKUs, compared to 1,600 square metres and 18,000 SKUs for traditional supermarkets.
Non-food sales – in particular, consumer electronics – remained strong and maintained double-digit growth in Q4, increasing their contribution to hypermarket sales.
Capital Expenditure
Capital expenditure across Carrefour Brazil's operations was R$1.8 billion (+1.2%), which included the opening of 68 new stores and an increase of nearly 5% in sales area.
About 47% of total capex was spent on expansion and 20% on store remodelling. In 2017, 38 stores were remodelled (31 hypermarkets and seven supermarkets) under Carrefour's 'New Generation' concept.
The total number of stores operated by the company as of 31 December 2017 amounted to 634, including 146 cash-and-carry outlets, 126 drugstores, 119 convenience stores, 103 hypermarkets, 76 petrol stations, 41 supermarkets and 23 wholesale facilities.
In 2018, according to CEO Noël Prioux, Grupo Carrefour Brasil aims to continue to expand its growth formats (notably Atacadão), grow the online business, and improve productivity.
The company will invest R$1.8 billion (€451.2 million) in capital expenditure and open 20 Atacadão stores. In addition, it plans to roll out click-and-collect in several of its hypermarkets and supermarkets, as well as enhance productivity and efficiency across the business.
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Branislav Pekic. Click subscribe to sign up to ESM: The European Supermarket Magazine.
