A shopper walks past a Carrefour signboard in Shanghai April 15, 2008 — Reuters pic
The French group also said today the decline in its 2011 profits would be at the more pessimistic end of its predicted range, raising doubts over its turnaround.
The news is likely to pile pressure on Chief Executive Lars Olofsson who is seen as being on borrowed time after a staggering six profit warnings in a little more than a year and a string of high-level defections and strategy U-turns.
In October, the world’s No.2 retailer behind US group Wal-Mart, had predicted a fall in 2011 operating profit of 15-20 per cent.
The group, with more than 9,500 stores in 32 countries, reported a 0.8 per cent drop in fourth-quarter sales to €24.15 billion (RM97 billion), below the €24.32 billion average forecast in a Thomson Reuters poll of eight analysts.
Disposable incomes across much of Europe are being squeezed by rising prices, muted wage growth and austerity measures, and shoppers are worried the euro zone debt crisis could drive the region back into recession.
Tesco, the world’s third-biggest retailer issued a profit warning last week after poor Christmas sales while German retailer Metro posted a quarterly sales decline, having warned on profits in December.
Dutch grocer Ahold earlier today posted a smaller-than-expected rise in fourth quarter sales as worsening trade in its central European business offset market shares gains in the Netherlands and the united states.
Carrefour is suffering more than most because it makes the bulk of its sales in hypermarkets, which are losing out to specialist stores and it is more exposed to some of Europe’s weakest consumer markets, like debt-laden Spain and Italy.
In France, where Carrefour is losing market share amid fierce price competition from unlisted rivals such as E.Leclerc, sales at hypermarkets open at least a year fell 4.7 per cent, excluding fuel, deteriorating from a 4.6 per cent decline in the third quarter.
That was its worst performance since the third quarter of 2009 when French hypermarket sales fell 5.1 per cent and it was mostly due to a 7.2 per cent drop in sales of discretionary non-food items
Elsewhere in Europe, austerity and economic uncertainty hit sales in Spain, Italy, Greece and Poland.
Emerging markets remained a source of growth with Brazil posting like-for-like growth of 4.6 per cent
But China was again disappointing, with like-for-like sales falling 6.1 per cent due to mild weather conditions that hit purchases of non-food items and tough legislation restricting markdowns.
Carrefour shares lost 43 per cent last year, underperforming the European retail sector, which lost seven per cent. — Reuters
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