Mixed first quarter from Casino, Laurus

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Two European food retail groups issued their first quarter results
last month, figures which reflected the ongoing tough conditions in
many countries across Europe and the rest of the world.

France's Casino group posted a 1 per cent increase in sales to €5.3 billion during the quarter, although the underlying performance (excluding the impact of disposals) was a slightly better 3 per cent. On a constant currency basis, the increase was 5.6 per cent.

Casino said that the performance was helped by a better-than-expected performance in the French market, where the weak economy has had a major impact on consumer spending levels. Sales were 3.1 per cent ahead of the previous year at €4.3 billion, helped in part by a strong performance from the Leader Price discount chain - sales there were 8.8 per cent higher as cash-strapped French shoppers switched to cheaper store formats.

Larger hypermarket and supermarket stores fared less well, however, with sales down 0.3 per cent and 0.1 per cent respectively compared to the previous year, but Casino claimed that this was a better performance than its main rivals over the same period. Carrefour's hypermarket sales slumped by 3.7 per cent in the first quarter, for example.

International sales growth, meanwhile, was 16 per cent, with good performances from every overseas market (the US, Poland, Argentina, Uruguay, Venezuela, Thailand) apart from Taiwan - in particular, a return to growth in Poland.

Casino also has a stake in Dutch retailer Laurus, whose burgeoning recovery was brought to an abrupt halt in the first quarter, again due to the weakness of the Dutch economy.

Laurus has been involved in a bitter price war with main domestic rival Albert Heijn (part of the Ahold group) over the last few months as Dutch consumers tightened their belts, and this has inevitably taken its toll. Like-for-like sales were down 7.7 per cent at the group's three fascias (Edah, Konmar and Super De Boer), while reported sales were 12 per cent lower at €1.07 billion, reflecting the sale of a number of underperforming stores as the group restructured.

This restructuring has also involved a revamping of the remaining store portfolio, and the initial results have been encouraging. Sales at two new format Edah Lekker &Laag stores have risen substantially - by tens of per cent - and the pilot is to be extended to include four other stores in the near future. Two new Konmar Superstores fared so well that a further seven outlets have added to the revamp list.

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