EUROPE’S BIGGEST retailer Carrefour will unveil another quarter of lacklustre sales tomorrow, highlighting the scale of the challenge facing incoming chief executive Georges Plassat.
The respected retail veteran joined the company on April 2nd, but is only taking the helm officially in June.
Analysts are thus ruling out big strategic announcements this week and will focus on any progress Carrefour has made with its plans to lower prices to boost sales in its French stores.
The world’s second-largest retailer after Wal-Mart has failed under outgoing boss Lars Olofsson to reverse years of underperformance in its main European markets
First-quarter sales should show little change from trends seen in the fourth quarter, with weakness in French hypermarkets and in austerity-hit southern Europe, where cash-strapped shoppers cut discretionary spending on clothes and electronics. In key emerging markets, China is likely to continue to struggle while Brazil should put in a robust performance.
“We expect another weak quarter for Carrefour with underlying like-for-like [growth] in most key markets remaining disappointing,” Morgan Stanley analysts wrote in a note.
Ten analysts polled by Reuters on average expect Carrefour to unveil first-quarter sales of €22.6 billion. That would be up 2 per cent from €22.15 billion in the first quarter of 2011 and reflect additional store opening days and higher fuel prices. Stripping out fuel, currency moves and calendar effects, sales are likely to be flat or lower.
Closely watched underlying French hypermarket sales are tipped to fall 2.7 per cent, excluding fuel, after dropping 4.7 per cent in the fourth quarter of 2011.
The deconsolidation of Coop Atlantique stores, one of Carrefour’s largest franchisees which left Carrefour to join unlisted rival Systeme-U, should also weigh on both French hypermarket and supermarket sales, analysts said.
Carrefour is heavily exposed to some of Europe’s weakest economies, such as debt-laden Spain, Italy and Greece, where shoppers have been cutting back most.
The group has been struggling for years, partly due to its reliance on hypermarkets, which have been losing out as shoppers buy more goods locally and online. – (Reuters)
