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.