With a mere 1.4% growth in sales to E20.46bn (£17.6bn), Carrefour’s performance remained weak in its second quarter.

The French giant is working to address problems that need fixing

Nonetheless, it has addressed several key issues and the benefits are expected to be seen in the future.

Plans for the Drive format, ecommerce, supply chain and decentralisation are all now on the table and implementation of change in most of these areas is well under way.

Domestic sales inched down 0.2% to E9.65bn (£8.3bn) as, for once, hypermarkets outperformed supermarkets. The former were trading against an easy comparable, unlike their smaller counterparts, which were also impacted by weather conditions.

However, previously unstoppable, currency depreciation-struck Latin America is finding it increasingly difficult to consistently offset gloomy European results. Like-for-likes slowed in Brazil while sales increases in Argentina must be tempered by rampant inflation and a government-backed scheme to freeze supermarket prices.

Diverging trends are emerging in southern Europe. Italy lurched to a 9.9% fall in like-for-likes, which calls for a new commercial strategy and further store refurbishments, while Spain showed some resistance. Difficulties may yet arise in other markets across the continent. Belgium slipped back into negative territory while Poland and Romania are approaching tricky points in their respective retail market development.

Carrefour China’s long-anticipated increase in like-for-likes has finally happened, it was up 0.4%. However, it is far too soon to draw a trend from these results. While not disparaging chief executive Georges Plassat and his team’s efforts, Carrefour is now merely fixing problems that were not properly addressed for years and the retailer remains weighed down by the heavy burden of its recent past.

Like an oil supertanker, Carrefour takes a long time to stop and even longer to turn around, leaving the waters around it open for more ship-shape vessels to forge ahead. Those that are doing so have displayed consistent performance, such as price-focused Leclerc in its home market. The expectation is that Leclerc will grow by 5% this year, threatening Carrefour’s leadership.

Even so, rankings are important only as a matter of pride and we believe it is better to be a number two, and in relative good health, than an ailing number one.

  • Gildas Aitamer, retail analyst, Planet Retail.

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