© Reuters. FILE PHOTO: A buyer pushes her procuring trolley in entrance of a Carrefour Hypermarket retailer in Saint-Herblain close to Nantes, France January 15, 2021. REUTERS/Stephane Mahe GLOBAL BUSINESS WEEK AHEAD
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By Dominique Vidalon
PARIS (Reuters) -France’s Carrefour (EPA:) mentioned on Wednesday it seemed to 2022 with confidence after its gross sales progress accelerated within the first quarter, pushed largely by Brazil, its second-largest market.
In an inflationary atmosphere made worse by the Ukraine disaster, Carrefour would defend the buying energy of consumers and on the identical time reinforce its financial mannequin, its finance chief Matthieu Malige advised analysts.
To take action, the French retailer mentioned it might depend on its Carrefour branded merchandise, promotional actions and loyalty programmes whereas additionally stepping up price financial savings.
Europe’s largest meals retailer reiterated a goal to generate free money circulate above 1 billion euros ($1.1 billion) in 2022 and with price inflation accelerating, it mentioned it now aimed for greater than 900 million euros in price financial savings this 12 months.
Money is essential to the French meals retailer’s plans to step up its digital commerce growth.
The agency additionally mentioned that having achieved 400 million euros on the 750 million euros share buyback programme it introduced in February, it might launch the second tranche within the coming days.
HYPER TENSION
Carrefour reported that its first quarter gross sales reached 20.239 billion euros ($22 billion), marking like-for-like progress of three.4%, pushed by stable progress in Brazil and Spain whereas within the core French market gross sales had been flat. This was an acceleration from 0.7% gross sales progress for the group within the fourth quarter 2021.
However gross sales at French hypermarkets, whose revival has been a precedence for Carrefour boss Alexandre Bompard, fell 1.1% within the quarter in contrast with a 1.3% decline within the fourth quarter 2021.
“This highlights the weak point of the format provided that decrease pricing of the hyper format ought to profit within the present inflationary atmosphere,” Bernstein analysts wrote in a word.
Carrefour is within the final leg of a five-year plan begun in 2018 to chop prices and enhance e-commerce funding to enhance revenue and gross sales, because it battles on-line rivals akin to Amazon (NASDAQ:) and discounters like Lidl and unlisted Leclerc.
Bompard, who was reappointed in Could 2021 for one more three years, is engaged on a brand new strategic plan and an asset evaluate.
Carrefour shares have gained 27% thus far this 12 months, however nonetheless commerce 7% beneath when Bompard took over in July 2017.
($1 = 0.9212 euros)
