French food retailer Carrefour detailed its latest earnings this week, revealing solid growth globally in the first half (H1) of 2022 despite declining profit across Europe.
Across that region, the French grocer’s return on investment (ROI) dropped 13% in H1, from €412 million ($419 million) to €357 million ($363 million) despite a growth in sales.
The company put the decline down to poor performance in Belgium, where the hangover from logistical challenges in Q4 2021 added to the country’s highly competitive market to hurt Carrefour’s overall European performance.
Carrefour stores in Belgium also experienced empty shelves last year following strikes at the Kuehne+Nagel distribution center and the Super Transport freight company.
But home to 40 hypermarkets, 440 supermarkets and 311 convenience stores under the brand, the country will continue to remain a key market for the French group.
Elsewhere on the continent, the picture was more optimistic with the business reporting a net profit of €357 million H1 across all European markets, about 44% of its overall total profit.
As in previous years, the largest slice of Carrefour’s European income stems from its core market of France, where the group operates nearly 6,000 stores and generated a profit of close to €200 million in the first half of the year. The strongest growth however was seen in Poland and Romania, which saw a year-on-year (YoY) increase in H1 income of 10.3% and 4.2%, respectively.
In a presentation on the group’s H1 results, Carrefour observed that “consumption patterns proved resilient” despite rising inflation. Nonetheless, the company cited “a slight evolution in consumer purchasing behavior” during the second quarter, “particularly in European countries where inflation is the most pronounced such as Spain and Romania, reflecting growing consumer attention to purchasing power constraints.”
Moving forward, the company referred to its competitive pricing, Carrefour branded products, the Supeco discount supermarket and campaigns such as the “30 products for €30” scheme in France as areas where it is looking to increase value for money and protect customers from rising wholesale prices.
Digital Expansion Strategy
Outside of Europe, Carrefour has recorded strong growth in Latin America with the completion of Grupo BIG’s acquisition in Brazil last June, and has now begun the process of exiting its other key non-European market — Taiwan — to “refocus Carrefour on its core strategic markets in Europe and Latin America,” the group said in a press release.
The firm has stated that further strategic priorities will be announced in November when CEO Alexandre Bompard is expected to detail the group’s vision for the next four years.
Those priorities will likely include plans to accelerate the retailer’s billion-dollar digital expansion strategy and enhance its technological capacity with more innovations like Carrefour’s first cashierless retail solution, dubbed Flash 10/10.
The store, which opened in Paris last year, uses artificial intelligence (AI) and sensors to automatically track and charge customers for items they add to their cart, enabling French shoppers to simply walk-in, pick-up items, and walk out.
In another digital initiative earlier this year, the retailer launched its “Brut Shop” — a joint company dedicated to social commerce market or live shopping — partnership with digital media company Brut.
As part of the deal, 60% of Carrefour customers who say they are interested in live shopping, according to the retailer, will have access to “a unique and responsible website” to make their online purchases, while participating in live-streamed video events on social networks.
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