Carrefour grows despite currency impact

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Europe's biggest food retail group Carrefour has reported sales
growth of 1.3 per cent for the first half of 2003, even after the
impact of negative currency exchanges. Second quarter sales grew at
current rates for the first time in 18 months, a sign, perhaps, for
Carrefour that the worst is now behind it?

First half sales at leading European food retailer Carrefour​ were ahead of the same period a year earlier, even after the negative impact of currency exchange.

Turnover for the six months to 30 June was up 1.3 per cent to €37.4 billion, but would have been 6.4 per cent higher if not for the currency effect, the company said.

The first half performance was boosted in particular by a solid second quarter, when sales at current exchange rates rose for the first time in the last six quarters. Second quarter sales were €19.1 billion, up 2.9 per cent despite a negative impact of 3.9 per cent related to currency translation.

In the group's five main European countries - France, Spain, Italy, Belgium and Greece - sales increased 5.4 per cent and represented 82 per cent of the second quarter total. The three month period also saw the group open 10 hypermarkets, 35 supermarkets, 102 hard discount stores and 46 convenience stores, a total of 193 new stores (or 352 for the first half as a whole).

Sales in France were up 2.9 per cent to €19.2 billion for the first half, driven by a solid performance from the group's hypermarkets (up 1.4 per cent to €10.1 billion), although the hard discount operations continued to show the fastest growth, improving sales by 11.6 per cent to €991 million.

A refit programme involving 50 to 70 supermarkets, as well as further discount store openings, should boost French sales further in the coming quarters, the group said.

In the rest of Europe, sales were €13 billion, up 8.4 per cent (8.7 per cent at constant exchange rates), with rises of 8.8 per cent in Spain, 9.2 per cent in Italy and 2.3 per cent in Belgium. The group also continued to record good increases in Polish and Greek hypermarket sales.

Latin American sales of €2.6 billion were up 12.7 per cent at constant rates, continuing evidence that the company's strategy there is good, Carrefour claimed, but a negative exchange rate impact of 39.3 per cent meant that reported sales in euros were some 26.5 per cent lower than in the first half of 2002. The currency impact was, however, significantly lower in the second quarter than in the first, a sign that the situation may finally be improving.

The Brazilian and Argentine units both recorded improvements in first half sales at constant exchange rates, of 14.6 and 3.9 per cent respectively, although the Argentine business struggled in the second quarter, with lower volumes sold through the supermarkets there.

In Asia, sales reached €2.4 billion, up 12.3 per cent at constant currencies but down 5.9 per cent in actual terms, again due to currency translation. Sales in China rose 7.1 per cent to €641 million, while those in Taiwan dropped 18 per cent and in Korea 10.8 per cent, due entirely to negative exchange rates - particularly good news for Korea, where sales at constant currencies had been sliding as well for several quarters.

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