EUROPE’S BIGGEST retailer, Carrefour, is reviewing its flagship hypermarkets revamp and warned 2011 profit would be at the bottom end of already pessimistic forecasts as cash-strapped shoppers cut back on spending.
The potential delay to the rollout of the more upmarket Carrefour Planet piles further pressure on its architect, chief executive Lars Olofsson. The Swede, who marked three years in the job earlier this month, is seen as being on borrowed time after six profit warnings in little more than a year and a string of management departures and strategy U-turns.
The world’s second largest retailer behind US group Wal-Mart is relying on the revamp to turn around years of underperformance in Europe.
Yesterday, it vowed to focus on a more immediate plan to cut prices and target promotions better to lure shoppers who slashed purchases of discretionary non-food items in France, southern Europe and China in the fourth quarter.
Carrefour cautioned 2011 operating profit would be at the bottom of a forecast decline of 15-20 per cent, making it the latest in a procession of top European retailers to warn that business is getting tougher.
Disposable incomes are being squeezed by rising prices, muted wages growth and austerity and retailers worry that the euro zone debt crisis could drag the world back into recession.
Electronics group Kesa posted a drop in underlying sales, while Dutch grocer Ahold published a modest rise. Ahold said fourth-quarter sales increased in the US and the Netherlands as its outlets gained market share.
Revenue at US stores open at least a year rose 2.9 per cent from a year earlier, excluding gasoline sales, said Amsterdam-based Ahold. The retailer’s Dutch unit, which includes the Albert Heijn chain, also reported same-store sales growth of 2.9 per cent.
Chief executive Dick Boer, who took the helm in March, unveiled a plan in November to boost sales growth by expanding Ahold’s geographic reach. A minimum of 50 supermarkets will open in Belgium in the next five years, while the company aims to triple online sales to €1.5 billion and open at least 150 convenience stores in Europe. – (Reuters/Bloomberg)
