Exchange rates curb Casino growth

While Carrefour's post-currency improvement was a creditable 2.9 per cent, Casino's was a more modest 0.5 per cent, but this was partly due also to the sale of a number of stores in the US which were a poor fit with its portfolio there.

Total group sales for 2003 reached €22.98 billion, just marginally ahead of 2002 figures. At constant exchange rates, and excluding the impact of the disposal, sales were 5.2 per cent higher.

But if Carrefour's domestic performance was relatively poor (sales rose just 2.1 per cent, largely due to its dependence on the hypermarket format which is currently out of favour with French consumers), Casino's French businesses posted good results for 2003.

Domestic turnover was 4.4 per cent higher than in 2002, and, like Carrefour, was boosted by a strong showing from the discount and superette/convenience store business units. These stores accounted for three-quarters of all the new outlets opened by Casino in 2003, and were by far the most successful store format for the group, showing sales growth of 10 per cent (discount) and 11.5 per cent (superettes).

But if the company's overseas operations account for just 20 per cent of total sales, the impact of exchange rate fluctuations means that their performance plays a more important role in the company's results as a whole.

Organic sales at the foreign units - in the US, Poland, Argentina, Uruguay, Venezuela, Thailand and Taiwan, as well as partly-owned businesses in Brazil, Colombia and the Netherlands - showed strong growth, rising by 8.8 per cent in the final quarter of the year alone.

This was due to a recovery in the economies in Asia, the US and Latin America, as well as Casino's own efforts to improve efficiency and reduce costs.

Only Poland, where the company has around 190 Géant, Casino and Leader Price stores, continued to struggle, despite a major restructuring of its business there. However, the company said it expected to see the first fruits of the restructuring programme in the first half of 2004.

With economies beginning to improve across the world, Casino is well placed to reap the benefits of a solid business model in most of its international businesses. The US business, Smart & Final, is now focused solely on the food retail sector following the sale of non-core foodservice operations in Florida and California, while the company's Brazilian partner, CBD, looks set to improve its market share by snapping up part of the Ahold business there - although Casino's bid to buy some of Ahold's Argentine units failed after negotiations broke down earlier this month.

Laurus, the Dutch group which Casino also part-owns, continues to struggle, however, and the company will hope to see a recovery both here and in Poland in 2004 to consolidate its position as one of the European elite - it currently ranks in 13th place.