International stores giant Carrefour is to cut prices and slash costs after profits slumped last year.

The French retailer, which operates in Asia and Latin America as well as Europe, will invest €600m (£556.5m) “to reinforce sales dynamics”, make operating cost savings of €500m (£463.8m) to “invest in sales” and limit capital expenditure to €2.5bn (£2.32bn).

Carrefour posted a group share of net income from recurring operations in 2008 down 32.8 per cent to €1.26bn (£1.17bn) on sales up 5.9 per cent to €86.97bn (£80.6bn). Group share of net income was down 44.7 per cent to €1.27bn (£1.18bn).

Chief executive Lars Olofsson described the performance as “resilient” and said he was determined to beat the competition.

He said: “Our objectives for the future are clear: generate profitable, sustainable, organic growth that outpaces that of the market, and improve our margins.

“To accelerate our growth, we will strengthen our positions in France and Europe and focus our expansion on our growth markets with the highest potential.

“By increasing our knowledge of our customers and better serving them, by transforming ourselves to be more agile, improve execution and gain in operational efficiency and by regaining market leadership through innovation, we will achieve our ambition – make Carrefour the preferred retailer.”