Carrefour profit hit by downturn

The international marketing magazine for fresh produce buyers in Europe
Carl Collen

BY CARL COLLEN

Carrefour profit hit by downturn

The French group saw sales growth during 2008, but yearly profits took a tumble

Carrefour profit hit by downturn

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Retail giant Carrefour has reported a fall in year-on-year group profit of 45 per cent to €1.27bn for 2008, down from €2.3bn the previous year, as a result of slowing domestic growth and higher costs.

Non-recurring charges for the year soared to €524m, including €396m worth of impairment charges.

Overall sales for the year grew 5.9 per cent to €87bn, but French sales rose just 0.9 per cent on the previous year to €37.96bn, attributed in part to a fall in non-food sales at hypermarkets.

European sales excluding France increased 5.1 per cent to €32.4bn, with sustained growth in Spain, Romania and Portugal – however, that growth slowed across the continent in the fourth quarter, Carrefour said.

Elsewhere, Latin American sales jumped 27.9 per cent in 2008 to €10.5bn, with Brazil's Atacado chain in particular registering "solid sales growth".

Asian operations provided the group with a "satisfying year", it said, with sales up 10.9 per cent to €6.07bn compared with €5.48bn in 2007.

And despite the lower profit and slower fourth quarter, the group remained optimistic that it would ride out the economic crisis.

"Carrefour's resilient performance in 2008 underlines the group's solid fundamentals," said group CEO Lars Olofsson. "In a trading environment that remains challenging, we will focus on boosting our sales dynamics while improving our organisation and reducing our costs."

The group said that it would prioritise sales dynamics in 2009 with a €600m investment, would make operating cost saving of €500m to invest in sales, and would increase selectivity when it comes to further investments.

"Our objectives for the future remain clear: generate profitable, sustainable organic growth that outpaces that of the market, and improve our margins," Mr Olofsson added. "To accelerate our growth, we will strengthen our positions in France and in Europe and focus our expansion on markets with the highest potential.

"By increasing our knowledge of our customers and better serving them, by transforming ourselves to be more agile, improve execution and gain in operational efficiency and by regaining market leadership through innovation, we will achieve our ambition: make Carrefour the preferred retailer," he added.

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