French supermarket retailer Casino posted a 3.1% rise in first-quarter sales on Tuesday, reflecting strong sales at its Géant Casino hypermarkets and a resilient performance in Brazil despite food inflation.
Casino, whose credit rating was cut to junk by Standard & Poor's in March 2016 and which has been criticised by US activist fund Muddy Waters, is under pressure to show that it can revive sales and profits in France, as conditions in Brazil remain tough.
Casino, which controls Brazil's Grupo Pão de Açúcar, posted first-quarter sales of €8.9 billion ($11 billion), in line with analysts' expectations for sales of €8.89 billion.
Excluding acquisitions, currency effects and revenue on fuel, sales rose by 3.1% against 3.2% growth in the fourth quarter of 2017.
Cut Prices
In France, Casino has cut prices at Géant hypermarkets and reduced retail space for non-food items in response to competition from online and small convenience stores. It has also increased its focus on organic and fresh food products.
Same-store sales at the Géant Casino hypermarkets in France rose by 2.1% – an acceleration from 0.3% growth in the fourth quarter of 2017 – while the group's Monoprix-, Franprix- and Casino-branded stores also posted robust performances.
In Brazil, the group's performance was helped by the success of a cash-and-carry format despite food deflation.
Stark Contrast In Performance
Casino's quarterly performance marked a stark contrast to that of larger rival Carrefour, whose French hypermarket sales turned negative again in the quarter, amid stiff competition and strikes during the Easter holiday.
Casino, which faces intense competition in France, has also begun talks on a forming a partnership regarding the purchasing of food and non-food items with domestic rival Auchan.
Last month, Casino's upmarket Monoprix chain also became the first local retailer to agree to sell groceries via Amazon.
News by Reuters, edited by ESM. Click subscribe to sign up to ESM: European Supermarket Magazine.
