Carrefour’s turnaround plan is moving apace, according to analysts at Planet Retail.
Commenting on the retailer’s Q2 results, Gildas Aitamer, retail analyst at Planet Retail, said: “This quarter illustrated Carrefour’s desire to resume European expansion – taking advantage of years of depressed sales performances in the region. We observed a strong push in small formats in Poland and Spain, for instance, as well as a resumption of hypermarket openings in Central Europe. In parallel, acquisitions of smaller ailing competitors or capitalising on larger retailers’ disengagement from difficult markets were to the fore.
“The departure from India caused a stir due to the market’s vast potential, but we believe the withdrawal makes sense. With merely five stores, Carrefour would have had to invest massively over a substantial amount of years to eventually get a return on investments. We believe the resources are better employed in fixing key markets at present.
“Another long-term growth prospect is Africa where new markets (Kenya) and new channels (e-commerce) are in the offing. Allied with this, local franchisees continued to fuel expansion both in term of openings and acquisitions.
“Carrefour has had to address its old demons in a limited time, but we remain confident the plan is moving apace. The management team is under pressure to show progress on Carrefour’s turnaround, especially in its home market, where positive like-for-likes are essential. Here, price competition allied with still-depressed consumer spending are exerting pressure on hypermarkets. Nevertheless, it is understood that supermarkets have had satisfying results. Going forward, Carrefour is expected to benefit from a brighter outlook in a number of European markets from Spain to Poland to Romania.”