Carrefour SA

PARIS – Despite a stubbornly difficult consumer market in France, retail giant Carrefour SA saw business improve at big-box stores in the second quarter as it continued to focus on low prices.

The world’s second largest retailer after Wal-Mart Stores Inc. reported a 3 percent rise in like-for-like sales over the period, lifted by higher growth in its smaller domestic stores coupled with the better performance of the larger outlets.

But the market in France, where grocers are under pressure to keep prices down, continues to be “persistently challenging,” the company said. Carrefour has struggled to gain ground on its home turf amid stiff competition and weak consumption.

The group’s revenues over the three-month period ended June 30 totaled 21.8 billion euros, fueled by faster sales growth elsewhere in Europe and abroad.

Speaking to analysts and journalists during a conference call to discuss the sales on Thursday, chief financial officer Pierre-Jean Sivignon said the performance “confirms the relevance of our multi-format and omnichannel model. ”

He added the company would stick to its strategy in France, where sales rose 1.9 percent on a like-for-like basis, excluding petrol and calendar effects, reflecting continued investments in promotions to defend market share. Revenues in France, where the group generates slightly more than 40 percent of group revenue, reached 9.9 million euros in the quarter.

Sivignon cited the investments in price positioning, a focus on fresh and organic food and renovating hypermarkets as contributing to the faster growth than the previous quarter. Hypermarkets posted a 0.5 percent rise, versus a 1.6 percent drop the previous quarter.

The group said it was also faced a competitive pricing environment in Spain, Italy and Belgium.

Growth in Europe, excluding France, rose 3.4 percent on a like-for-like basis excluding petrol and calendar effects, to 5.8 billion euros, led by growth in food sales in Italy.

In Spain, where Carrefour is the number-two player, sales were given a boost by 36 new hypermarket stores the company is buying from the Spanish group Eroski. Once the acquisition is finalized, Carrefour’s Spanish presence will be expanded into over 20 new cities.

Carrefour sales outside of Europe rose 3.4 percent on a like-for-like basis, excluding petrol and calendar effects, to 6 billion euros. The company was not allowed to provide details about its activities in Latin America, where it is has filed to list Brazilian operations Grupo Carrefour Brasil shares on the São Paulo stock exchange.

The company said that currency rates, mainly the rise of the Brazilian real, gave an added lift to international sales. Falling inflation also helped the company’s performance over the period, Sivignon said.

He confirmed that Carrefour is sticking to its full-year target of 3 percent to 5 percent growth at constant exchange rates.

The big-box retailer has in recent years renewed its focus on convenience stores and pulled out of some emerging markets.

Alexandre Bompard, who was named chairman and chief executive of the company last month, is scheduled to take up the new post on July 18.

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