Following today’s release of Carrefour’s figures for the 13 weeks ending 30th September 2023; Joe Dawson, retail analyst at GlobalData, a leading data and analytics company, offers his view: “Carrefour has kicked off the second half of its FY2023 with a weaker performance in its Q3, with like-for-like (l-f-l) sales rising by 9.0%, following 11.2% for the first half, as food inflation slowed in Europe and Latin America. The international grocer saw revenue growth in all its key markets, leaving it confident in its expectations for FY2023. Total group sales for the period increased 0.5% (+6.9% on a constant currency basis) to €23.6bn, against high comparatives in 2022 due to market conditions linked to the war in Ukraine. Store openings and smart ranging decisions have helped to drive l-f-l sales growth of 4.1% in Europe and 20.2% in Latin America, despite a 3.7% decline in l-f-l sales in Brazil as it saw the start of food deflation.
“Carrefour’s focus on expanding and improving its private label range has been an important strategic step as consumers continue to seek better value due to constrained finances, with own brand products representing more than 35% of food sales in Q3, up 3ppts year on year. This gives the grocer greater control over its price architecture and profits, making it more competitive with rivals and flexible to changing consumer needs. In September 2023, Carrefour put “shrinkflation” labels on branded products that increased in price and decreased in size, shifting the blame for price increases onto brands, boosting the credibility and attractiveness of its private label products. Additionally, it introduced a number of cuts and price locks as part of its “Frozen Prices” campaign.
“In France, which represents around 46% of Carrefour’s total sales, the hypermarket format continued to perform well, with l-f-l sales growing 4.2%, as consumers continue to seek low prices in larger stores due to persistent pressure on personal finances, supporting the success of Carrefour’s implementation of its “Maxi” method. E-commerce GMV was up 31% overall, increasing by 16% in France and 50% in Brazil, where its Atacadao business saw an improvement to its online operations, as the group aims to achieve its objective of €10bn in e-commerce GMV by 2026.
“In Q4 the group will aim to improve on the lighter growth it saw in Q3, expecting the current consumer trends of trading down from more expensive retailers and branded products to continue. Its private label range will serve well to cater to this, as well as its large store formats offering greater range and value.”
