The French company has sold its seven Chilean hypermarkets to the local retail group Distribution y Servicios (D&S) for €100 million as part of its drive to improve the profitability of its assets in the region. Carrefour has been active in the Chilean market since 1998.
But the company stressed that the move was not the start of a complete withdrawal from Latin America, and that it would continue to pursue its multi-format expansion in the four remaining countries there in which it is established.
Carrefour operates 85 hypermarkets, 113 supermarkets and 127 hard discount stores in Brazil; 24 hypermarkets, 141 supermarkets and 298 hard discount stores in Argentina; 11 hypermarkets in Colombia and 27 hypermarkets in Mexico.
The difficult economic conditions in the Latin American region have taken their toll on results at Carrefour, despite good like-for-like growth from most of its businesses there. Total sales in the region were €3.98 billion in the first nine months of 2003, up 11.5 per cent at constant exchange rates but down 18.4 per cent in actual terms as a result of weak currencies in Argentina and Brazil.
But the situation is improving steadily, with the impact of exchange rates reduced from -39 per cent in the first half of 2003 to -29.9 per cent for the nine months (and to just -5 per cent for the third quarter), and Carrefour clearly believes in the potential of Latin American markets given its excellent like-for-like growth rates.
The problem with the Chilean business was that it was simply too small to make much of an impact, and Carrefour will be much better off concentrating on its larger operations in the bigger markets - although its decision not to bid for the Brazilian business of Ahold (which looks set to be shared between Wal-Mart and CBD/Casino) still seems unusual, given the company's rapid expansion there in recent years.