Carrefour Sales Fall

Carrefour's results hit by France, Spain.

with contributions from Liz Webber

PARIS — Reflecting a tough economic environment in France and deterioration in Spain, Carrefour Group said first-quarter revenues slipped 2.8 percent to 22.72 billion euros, or $29.71 billion. On a same-store basis, sales fell 4 percent.

This story first appeared in the April 17, 2009 issue of WWD.  Subscribe Today.

The world’s second biggest retailer after Wal-Mart Stores Inc. said its French hypermarkets showed resilience, but consumers continued to shun nonfood purchases and hunt for bargains.

Sales in France, which account for about 42 percent of Carrefour’s revenues, dropped 5.1 percent to 9.59 billion euros, or $12.55 billion.

Dollar figures are converted from average exchange rates for the period.

Carrefour also blamed price deflation of food and petrol for the declines, and highlighted the loss of a day of trading in February and the fact that Easter fell in April this year as opposed to March in 2008.

“We had a decent pre-Easter period overall in the group, but it’s too early to speak about the month of April or the whole second quarter,” Eric Reiss, the firm’s outgoing chief financial officer, told a conference call Thursday. “We are being very cautious with the period that’s ahead of us.”

(Next month, Reiss will be become director of Carrefour’s hypermarkets in Brazil and will be succeeded by Pierre Bouchut, who comes from Schneider Electric and was formerly chief executive officer of Carrefour rival Casino Group.)

Carrefour cited “unfavorable consumer trends” in most growth markets and a mixed performance internationally, with revenues in Latin America bounding 14 percent at constant exchange rates, while China growth slowed to 3.1 percent in the three months ended March 31, versus a 6.9 percent gain in the fourth quarter. Sales contracted 5.6 percent in Spain, 5.4 percent in Italy and 3.4 percent in Belgium.

The retailer, whose largest shareholder is LVMH Moët Hennessy Louis Vuitton chief Bernard Arnault and Colony Capital, has been stepping up markdowns to spur spending. Reiss told analysts Carrefour increased promotional activity about 10 to 20 percent in the quarter.

Carrefour ceo Lars Olofsson said cost reductions and streamlined operations would only improve figures in the second half. In the first quarter, Carrefour opened or acquired 210 new stores.