Carrefour promises faster growth

International retail giant Carrefour has pledged to accelerate growth and improve shareholder returns after reporting that it is on track to meet this year's objectives.

Between 2008 and 2010, Carrefour intends to reduce costs, limit capital expenditure to a maximum of €3 billion (£2.03 billion) and "make the brand work harder". From 2008, the ambition is that profits will grow at least in line with sales.

The retailer is to float its property business and use cash raised from from that and disposals to buy back shares to the value of as much as €4.5 billion (£3.05 billion). Disposals in 2007/08 are likely to raise approximately €1.5 billion (£1.02 billion). Bernstein analyst Christopher Hogbin said: "We expect these will be focused on smaller underperforming international operations, similar to the recent disposals in Portugal and Switzerland."

Carrefour reported first-half sales up 5.5 per cent to €38.85 billion (£26.35 billion), generating a 0.3 per cent improvement in profits to €1.36 billion (£922.4 million). In its French domestic market, Carrefour's hypermarkets and supermarkets achived "strong volume gains" and sales rose 2.5 per cent. The highest growth was in Latin America and Asia, where sales climbed 23.4 per cent and 14.2 per cent respectively. Hogbin said that the "extremely tough" French market meant that effective execution would be critical to Carrefour's success.