Carrefour has reported its best quarterly sales growth in five years – with sales growing 4.9% on an organic basis to €20.5bn.
In its second quarter trading update, the French supermarket chain also reported growth across all its main European markets – France, Spain, Belgium and Italy.
The strength of its performance in Italy was particularly surprising. Like-for-likes rose 2.9%, well ahead of the consensus analyst forecast of -2.8%. Carrefour said its Italian business benefited from a promotional campaign linked to the World Cup.
In its domestic French market, like-for-likes rose 2.1%, driven by strong sales in smaller format stores. However, even hypermarket stores were in growth – albeit by just 0.4%.
In emerging markets, like-for-likes grew 8.4%, with performance in Latin America significantly better than Asia.
Carrefour’s results have improved significantly under Georges Plassat, who became CEO in June 2012. Its shares have risen from less than €15 when Plassat took over to €27.59.
“CEO George Plassat has put in motion a new world order at Carrefour which, apart from reinvigorating the hypermarket business, is also looking at alternative avenues of growth,” said Himanshu Pal, retail insights director for Kantar Retail EMEA.
In Europe, Carrefour has focused on improving its price competitiveness and revamping stores. At the same time, it has exited a number of underperforming markets, including Singapore, Malaysia and Greece.
Last week, it announced it was leaving India where it currently operates five cash & carry stores.
Some analysts remain sceptical about Carrefour’s recovery. “Our view is that Carrefour remains structurally challenged, with unattractive formats in unattractive countries,” said Bernstein in a note to investors.
“It is still too dependent on hypermarkets in France, Western Europe and China.”