PARIS — Carrefour SA sales declined 2.4 percent, weighed down by unfavorable currency rates and lackluster business in Europe.
Stripping out the negative effect of exchange rates — particularly the Brazilian Real — sales were up 2.6 percent to 20.78 billion euros, led by growth in its Latin American markets.
The world’s second largest retailer after Walmart Inc., Carrefour is undergoing a broad overhaul as it seeks to adapt to shifting habits in consumption and bolster its digital presence. Chief executive officer Alexandre Bompard, known for steering the French electronics retailer into the digital sphere through a tie-up with the home appliance company Darty, outlined his plans for Carrefour’s turnaround in January.
Carrefour said its quarterly performance was affected by bad weather and tough competition in European markets, including its home market, France, where sales were up 0.9 percent.
The company is forging ahead with a transformation plan, introducing new payment methods, striking partnerships with other companies to transform e-commerce and opening new convenience stores.
In a conference call with analysts, Carrefour’s chief financial officer Matthieu Malige seized on the quarterly performance as an example of why the group is pushing its new plan, called Carrefour 2022.
“This quarter demonstrates that Carrefour 2022 is the right strategy for Carrefour and that it is urgent to implement it,” he said.
“Even as teams are keenly focused on the day-to-day business, a profound transformation momentum has taken shape since the announcement,” of the plan, he continued.
In a separate release, the company said it would name four new independent directors to the board — Amélie Oudéa-Castéra, Aurore Domont, Stéphane Israël and Stéphane Courbit — noting it seeks a younger, and digitally minded board with more women. In the analyst call, Malige lauded the digital and entrepreneurial skills of the new appointees.
Latin American sales dropped nearly 12 percent to 3.98 billion euros, dragged down by a worse-than-expected depreciation of the Brazilian Real compared to the euro and ongoing food deflation, the company said.
In Asia, sales were down nearly 11 percent to 1.77 billion, as the highly competitive e-commerce channel gained ground with consumers in China. Carrefour in January struck a partnership with Tencent in China to improve its digital and technological capabilities in that market. The deal had resulted in “rapid” progress, including the launch of a mobile application on WeChat that improved the visibility of Carrefour’s online offer in the country, according to Malige.
In Europe, the performance was mixed, with 4.4 percent sales growth in Spain led by its recent purchase of Eroski stores, while sales in Belgium decreased 0.4 percent, as business was affected by strikes.
Operations in France, which generated 9.49 billion euros, were also affected by strikes called by unions angered by the company’s restructuring plans. Carrefour has been working to decrease its reliance on big box stores —hypermarkets — while bulking up its fleet of smaller, convenient shops, and opened 76 new convenience stores in France over the period. The group introduced a new “pedestrian drive” service whereby customers can swing into stores on foot to collect online orders.
Carrefour also introduced a new blockchain tracing system for poultry products this quarter, which is plans to extend to other meat and vegetable products this year, Malige explained.
The company extended its assortment of antibiotics-free products in Belgium, Poland and Spain. Malige added that Carrefour intents to increase coordination among its operations in different European countries to leverage negotiations when it comes to purchasing.