Europe News

Carrefour sales growth slows on southern Europe

Balint Porneczi | Bloomberg | Getty Images

Carrefour, the world's second-biggest retailer, said on Thursday that like-for-like sales growth slowed in the third quarter, reflecting low consumer sentiment in austerity-hit southern Europe, and falling fruit and vegetable prices across the region.

Growth in Brazil, Carrefour's largest market after France, stayed robust in the quarter, however, while trading conditions remained weak in China.

Europe's largest retailer said third-quarter sales were 21.077 billion euros ($27.01 billion), in line with the average forecast of 21 billion in a Reuters poll of analysts.

Stripping out fuel and currencies, revenue grew 2.8 percent in the quarter, a slowdown from 4.9 percent growth in the second quarter.

Sales fell 1.2 percent in Spain after rising for three consecutive quarters, while revenue at French hypermarkets fell 0.2 percent after rising 0.4 percent in the second quarter, also snapping a growth streak of five consecutive quarters.

Carrefour makes 73 percent of its sales in Europe and has suffered from a reliance on the hypermarket format it pioneered, now that customers favor more local and online shopping.

In response, Chief Executive Georges Plassat has lowered costs, revamped stores, cut prices, simplified product offerings and given more autonomy to store managers, starting in France.

Chief Financial Officer Pierre-Jean Sivignon said on Thursday that analysts' consensus forecast for an operating profit of 2.38 billion euros this year was "reasonable". That would be a 6.34 percent rise from 2.238 billion in 2013.

Carrefour's resilient performance contrasts with the difficulties encountered by British rival Tesco, however, which is reeling from an accounting scandal and a downturn in trading that has shaken investor confidence in the once mighty brand.

Carrefour shares have lost 20 percent so far this year, while the European STOXX 600 Retail Index has shed 16 percent.

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