Carrefour SA

PARIS — Carrefour posted a 2.8 percent decline in third-quarter sales as currencies weighed on improved business in its most important markets of France and Brazil a year into the company’s broad overhaul.

“Carrefour has posted the best quarterly food sales growth since 2015,” said Matthieu Malige, chief financial officer of the group, speaking to analysts in a conference call.

The executive noted that the company had performed closer to market trends in France than in previous quarters, suggesting it is bridging a gap with rivals in the fiercely competitive market. It is too early to tell if efforts to lower prices in its French supermarkets had been perceived by customers, or if the improvement came from other efforts, he added.

Sales for the world’s second-largest retailer after Walmart totaled 21.09 billion euros for the period ending Sept. 30, up 2.1 percent on a like-for-like basis, with the retailer noting a better performance from all of its store formats as well as improved market conditions in France, while the easing of food price deflation in Brazil helped growth in Latin America.

Declines in Brazilian and Argentinian currencies weighed on quarter, with the negative foreign exchange effect coming to 5.5 percent.

In France, sales grew 2.1 percent to reach 10.1 billion euros, with the retailer flagging all store formats as contributing to the performance. Carrefour has been reallocating space in its big-box hypermarket stores, introducing space for outlets as well as for handling online orders. It said it had already reduced the selling space, particularly for non-food products, in those stores by more than 100,000 square feet of space in the stores so far, with an additional 400,000 square feet under consideration. It plans to test the addition of an electronic goods store, Darty, as a shop-in-shop before the end of the year.

The company is also shedding jobs, and has finished up a voluntary departure plan concerning 2,400 positions at its French headquarters.

In Brazil, where it is expanding its network of Atacadão stores, sales grew 5.1 percent to 3.04 billion euros. The retailer has added 14 of the cash-and-carry stores already this year, and aims for a pace of 20 per year in the future.

Southern Europe proved more challenging for Carrefour, with Spain and Italy posting declines, down 2.7 percent and 4.4 percent, respectively. The retailer noted intensifying competition in those markets.

In Asia, sales declined 2.8 percent, despite improvement in China on a like-for-like basis, and an increase in online business; Carrefour offers “ready to eat” produce through mobile applications in the country.

Carrefour confirmed its targets, which include selling off 500 million euros worth of non-strategic assets by 2020 and said that capex would sit between 1.7 billion euros and 1.8 billion euros this year.

Under the direction of chief executive officer Alexandre Bompard, who joined the group over a year ago, Carrefour has forged a series of partnerships and acquisitions as part of a broad turnaround effort to adapt to the rise of online commerce. The retailer teamed with Tesco and Super U to form purchasing alliances, and expects to see benefits of the tie-ups next year.

It turned to Google to develop new distribution models in France and joined IBM’s Food Trust Platform, as it expands its use of blockchain technology to track groceries.

In addition to a focus on technology and tinkering with store formats and delivery options, the company is also working to expand its range of organic produce. Over the quarter, food sales online grew above 30 percent. The company regrouped internet activities into one site in Italy, after doing so in Brazil, Romania and Poland in the first half.

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