Turnover at hypermarkets in the retailer’s home market fell 5.5 per cent, excluding fuel, as shoppers shied away from national brands in favour of Carrefour own-labels and general merchandise sales declined.
Carrefour intends to intensify hypermarket promotions in the second half. Across the group, the retailer will accelerate cost reduction and speed up openings in growth markets such as Latin America and Asia. It will also increase the roll-out rate of the new Carrefour Market supermarket fascia and plans to have converted 150 Champion stores to the new banner by the end of this year.
The retailer posted group sales growth of 6.7 per cent in the second quarter, bringing first half growth to 8.6 per cent. Carrefour aims to deliver sales growth of 7 per cent this year – the same as last year.
Carrefour chief executive José Luis Duran said: “In a difficult trading environment, the group posted a solid overall performance in the first half.
“I have decided to reinforce the commercial dynamic of our French hypermarkets to regain market share over the second half and simultaneously to accelerate our operational action plans to allow us to achieve our 2008 objectives.”
Bernstein analyst Christopher Hogbin said: “Carrefour has faced execution issues in improving its French store operations for several years, with the reality of little change usually triumphing over hope for improvement.
“Limited upside anticipated from rebranding the Champion supermarkets highlights the challenge in Carrefour’s key market and the cancellation of other capital expenditure projects to fund the Champion conversion likely puts further strain on the remaining business.”
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