Carrefour sees profits slip 14%

 

Europe's debt crisis, slow growth on the continent and a lacklustre
turnaround plan pushed French retail giant Carrefour's profits down 14%
last year, the company reported today.

The world's second-largest retailer by revenue said that net sales, driven almost exclusively by growth in emerging markets, edged up barely 1% to 81.3 billion euros (£67.9 billion) in 2011. Net profit, meanwhile, fell to 371 million euros (£309.8 billion).

While Carrefour's profit figures slipped less than the 20% the company had warned they might, the sales missed analyst expectations. The average predicted by analysts surveyed by FactSet was 91.5 billion euros (£76.4 billion).

Shares on the Paris bourse fell nearly 1% when the market opened today.

Carrefour has struggled for years to turn around its core hypermarket business, which has seen profit erode through lower prices and falling foot traffic. A plan to give the stores a new, more upmarket look has not made enough of a difference and the company said it would slow its rollout of the so-called Planet stores in 2012.

The company said the Planet stores were doing better than those it had not converted but not by as much as hoped for. It wants to drive down the cost of revamping the stores before continuing with its full plan.

As Europe's debt crisis and austerity plans have pushed many customers to seek out bargains, Carrefour has tried to respond with more competitive pricing, accepting lower revenue for the time being. The question is when that strategy will pay off.

"In 2012, we will capitalise on our strengths while exercising strict cost and cash discipline to adjust to the environment in which we are operating," said chief executive Lars Olofsson.

"Carrefour will continue implementing its Reset Plan in France as well as local action plans in southern Europe, aiming at consistent lower prices, more targeted promotions, and a considerably enhanced Carrefour-branded product offer."

But the turnaround will not come soon enough for Mr Olofsson. The company has announced he will be replaced by clothing retail executive Georges Plassat in June.

Mr Olofsson's exit follows a concerted lobbying campaign by the same leading shareholders who secured the departure of his predecessor.

The Swede leaves Carrefour in almost the same troubled condition that he found it when he took over three years ago. As then, the company's performance and strategy are in doubt, the share price is lagging and key shareholders have given up waiting for management's repeated attempts to turn around the core hypermarkets business.

More than 70% of the company's sales are in Europe, by far its slowest growth area. In France, revenue barely grew last year, while it retracted in the rest of Europe.

By contrast, Asia and especially Latin America are booming for Carrefour. One especially bright note was a recovery in stores in Brazil, which the company had previously tried - and failed - to sell.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Guru Careers: Software Developer / C# Developer

£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...

Neil Pavier: Management Accountant

£45,000 - £55,000: Neil Pavier: Are you looking for your next opportunity for ...

Sheridan Maine: Commercial Accountant

£45,000 - £55,000: Sheridan Maine: Are you a newly qualified ACA/ACCA/ACMA qua...

Laura Norton: Project Accountant

£50,000 - £60,000: Laura Norton: Are you looking for an opportunity within a w...

Day In a Page

Sun, sex and an anthropological study: One British academic's summer of hell in Magaluf

Sun, sex and an anthropological study

One academic’s summer of hell in Magaluf
From Shakespeare to Rising Damp... to Vicious

Frances de la Tour's 50-year triumph

'Rising Damp' brought De la Tour such recognition that she could be forgiven if she'd never been able to move on. But at 70, she continues to flourish - and to beguile
'That Whitsun, I was late getting away...'

Ian McMillan on the Whitsun Weddings

This weekend is Whitsun, and while the festival may no longer resonate, Larkin's best-loved poem, lives on - along with the train journey at the heart of it
Kathryn Williams explores the works and influences of Sylvia Plath in a new light

Songs from the bell jar

Kathryn Williams explores the works and influences of Sylvia Plath
How one man's day in high heels showed him that Cannes must change its 'no flats' policy

One man's day in high heels

...showed him that Cannes must change its 'flats' policy
Is a quiet crusade to reform executive pay bearing fruit?

Is a quiet crusade to reform executive pay bearing fruit?

Dominic Rossi of Fidelity says his pressure on business to control rewards is working. But why aren’t other fund managers helping?
The King David Hotel gives precious work to Palestinians - unless peace talks are on

King David Hotel: Palestinians not included

The King David is special to Jerusalem. Nick Kochan checked in and discovered it has some special arrangements, too
More people moving from Australia to New Zealand than in the other direction for first time in 24 years

End of the Aussie brain drain

More people moving from Australia to New Zealand than in the other direction for first time in 24 years
Meditation is touted as a cure for mental instability but can it actually be bad for you?

Can meditation be bad for you?

Researching a mass murder, Dr Miguel Farias discovered that, far from bringing inner peace, meditation can leave devotees in pieces
Eurovision 2015: Australians will be cheering on their first-ever entrant this Saturday

Australia's first-ever Eurovision entrant

Australia, a nation of kitsch-worshippers, has always loved the Eurovision Song Contest. Maggie Alderson says it'll fit in fine
Letterman's final Late Show: Laughter, but no tears, as David takes his bow after 33 years

Laughter, but no tears, as Letterman takes his bow after 33 years

Veteran talkshow host steps down to plaudits from four presidents
Ivor Novello Awards 2015: Hozier wins with anti-Catholic song 'Take Me To Church' as John Whittingdale leads praise for Black Sabbath

Hozier's 'blasphemous' song takes Novello award

Singer joins Ed Sheeran and Clean Bandit in celebration of the best in British and Irish music
Tequila gold rush: The spirit has gone from a cheap shot to a multi-billion pound product

Join the tequila gold rush

The spirit has gone from a cheap shot to a multi-billion pound product
12 best statement wallpapers

12 best statement wallpapers

Make an impact and transform a room with a conversation-starting pattern
Paul Scholes column: Does David De Gea really want to leave Manchester United to fight it out for the No 1 spot at Real Madrid?

Paul Scholes column

Does David De Gea really want to leave Manchester United to fight it out for the No 1 spot at Real Madrid?