Carrefour stirs doubts over hypermarket revival
Friday, 20 January 2012
PARIS, Jan 19 (Reuters): Carrefour, Europe's biggest retailer, is reviewing its flagship hypermarkets revamp and warned 2011 profit would be at the bottom end of already pessimistic forecasts as cash-strapped shoppers cut back on spending.
The potential delay to the rollout of Carrefour Planet piles further pressure on its architect Chief Executive Lars Olofsson.
The Swede, who marked three years in the job earlier this month, is seen as being on borrowed time after six profit warnings in a little more than a year and a string of high-level management departures and strategy U-turns..
"Carrefour's Q4 trading update highlighted the significant challenges facing the business, with management giving little impression that they have a comprehensive or credible solution to address Carrefour's issues," said analysts at brokerage Bernstein.
The world's No.2 retailer behind US group Wal-Mart is relying on the revamp of some its Carrefour hypermarkets as more upmarket Carrefour Planet stores to turn around years of underperformance in Europe.
On Thursday it vowed to focus on a more immediate plan to cut prices and target promotions better to lure shoppers who slashed purchases of discretionary non-food items in France, Southern Europe and China in the fourth quarter.
Carrefour cautioned 2011 operating profit would be at the bottom of a forecast decline of 15-20 per cent, making it the latest in a procession of top European retailers, including Britain's Tesco and Germany's Metro, to warn business is getting tougher.
The potential delay to the rollout of Carrefour Planet piles further pressure on its architect Chief Executive Lars Olofsson.
The Swede, who marked three years in the job earlier this month, is seen as being on borrowed time after six profit warnings in a little more than a year and a string of high-level management departures and strategy U-turns..
"Carrefour's Q4 trading update highlighted the significant challenges facing the business, with management giving little impression that they have a comprehensive or credible solution to address Carrefour's issues," said analysts at brokerage Bernstein.
The world's No.2 retailer behind US group Wal-Mart is relying on the revamp of some its Carrefour hypermarkets as more upmarket Carrefour Planet stores to turn around years of underperformance in Europe.
On Thursday it vowed to focus on a more immediate plan to cut prices and target promotions better to lure shoppers who slashed purchases of discretionary non-food items in France, Southern Europe and China in the fourth quarter.
Carrefour cautioned 2011 operating profit would be at the bottom of a forecast decline of 15-20 per cent, making it the latest in a procession of top European retailers, including Britain's Tesco and Germany's Metro, to warn business is getting tougher.