Carrefour has reported a marginal rise of just 0.5% for its full year 2011. A weak fourth quarter performance, which saw group sales decline by 0.8%, capped off what has been a pretty dire year for the world’s second largest retailer, which saw it announce five profit warnings, a failed merger in Brazil and strategic difficulties in its core European markets.
Simon Chinn, lead consultant at Conlumino, said: “Despite all the ongoing murmurs in the French press about expected management shuffles, today was always going to be about Carrefour’s sales and, in particular, how many it brought in over the crucial Christmas trading period.
“Though there was some growth from its operations in Latin America and Asia, this alone was not enough to compensate for a significant slowdown in its core markets of France and western Europe.
“Carrefour is particularly vulnerable to the ongoing Euro Zone crisis, given its exposure to the downtrodden and austerity stricken markets in southern Europe and its extensive store estate of persistently underperforming hypermarkets on the Continent.
“While the rollout of its new Planet concept has continued as planned, with 81 stores trading under the format by the end of 2011, the jury is still out on whether Planet really is the saving grace of this outdated format.
“Given the lack of performance guidance in today’s results announcement, it’s clear Planet hasn’t been the optimal solution. The crux of the problem is consumers no longer really have the desire or need to shop at hypermarkets, the rapid growth of online sales in France over Christmas for example is evidence shopping habits have changed for good. While, in principle, the store revamps look good and significantly improve the shopping experience, they come at a significant cost.
“In reality, whatever refurbishment it goes through, a Carrefour hypermarket is never going to be on par with a department store along the lines of Printemps or Galeries Lafayette. Carrefour’s focus should be on improving its multi-channel shopping capabilities for customers, with greater integration of its web with physical store offer, something its rival Casino has done well and reaped the benefits from (Casino’s combined hypermarket and online non-food sales increased by 2.8% in Q4 2011).
“This is the way consumers are now shopping and Carrefour needs to adapt to these new shopping habits.”