French retailer Casino vowed on Tuesday to spend more on promotions this quarter to help cash-strapped shoppers after sales at its Géant hypermarkets in France fell sharply in the fourth quarter of 2022 amid competitive pressure.
Overall group sales growth slowed in the fourth quarter despite a robust performance in Latin America, and shares in Casino, whose domestic rivals include Carrefour and unlisted Leclerc, fell 2.5%.
The performance in France will be closely watched after Casino and Teract earlier this month said they were in preliminary talks to combine their retail activities there within an entity controlled by Casino.
The company, which has been facing concerns over high debt and low cash flow, is scheduled on 10 March to report its full-year earnings, having said previously it was aiming for a good level of profit and improved cash flow generation.
That outlook was not included in Tuesday's press release.
Casino, which also controls Brazil's Grupo Pão de Açúcar, said group fourth quarter sales reached €9.16 billion ($9.7 billion), up 4.4% on a same store basis, but slower than the 5.4% growth reported in the third quarter.
French Sales Below Estimates
In France, sales rose just 0.1% on a same store basis after rising 3.9% in the third quarter. That was below consensus expectations, which Jefferies analysts said stood at 2.7%.
'Full results will be reported on 10 March and will provide more insights into how this is impacting the precarious leverage position,' Jefferies added.
Sales at French hypermarkets fell 6.2% on a same store basis and by 4% at French supermarkets, while sales at convenience stores rose 4.5%.
Casino is banking on an expansion of city centre convenience stores and e-commerce, notably home delivery via partnerships with Ocado and Amazon, to boost sales.
The group said it opened 352 new convenience shops during the quarter and 879 new stores over the year, exceeding its target of 800 openings.
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