Europe's leading food retail chain Carrefour has surprised even itself with the publication of first half results which were much better than expected.
The company had forecast an economic slowdown in most of the countries where it operates, and set itself conservative targets of improving market share, reducing costs and improving cash management
But while net sales were duly impacted by the economic downturn, dropping 1.1 per cent to €33.1 billion, net profits were nearly 13 per cent higher at €604 million, helped by improvements at several European units, Asia and Latin America, the latter being all the more welcome as it came amid turbulent economic conditions. At constant exchange rates, group sales rose 3 per cent.
Sales in France were virtually unchanged at €16.6 billion, while the rest of Europe saw a 6 per cent rise thanks to improvements in Spain, Italy and Belgium. In the Americas, they rose 2 per cent to €3 billion at constant exchange rates, but slid 29 per cent when the devaluations of the peso and real were taken into account. Asian sales were up 4.8 per cent to €2.3 billion.
With the turbulent first half behind it, Carrefour is predicting a better second half, with improvements in like-for-like sales, more store openings and a further decline in the costs relating to the sale of Spanish stores which it sold in 2001. With this in mind, and with the warning that the economic situation in Latin America could further impact sales, the group is predicting sales growth of around 5 per cent at constant rates, and a 10-15 per cent hike in net profits.