Strong Latin America sales growth helps offset European declines at Carrefour.
BY JOACHIM BAMRUD
Less than a week after denying French media reports that it planned to sell its Latin America unit, Carrefour reports a strong third quarter in the region. Latin America sales grew by 14.4 percent to 3.4 billion euro (US$5.0 billion), the company said in its earnings statement today. "The Group’s growth markets, particularly in Latin America, continue to post dynamic sales," Carrefour CEO Lars Olufsson said in the statement.
That contrasts with a 0.8 percent decline in global sales in the third quarter, largely spurred by falling sales in Europe and Carrefour's own home market of France.
In fact, the double-digit sales growth in Brazil, Argentina and Colombia made them the best-performing markets globally in the quarter, beating other growth stars like China and Turkey.
Carrefour is the world’s second-largest retailer after Wal-Mart and ranks 11 among Latin America’s Top 500 companies thanks to 2008 sales of $15.5 billion.
GROWTH AND EXPANSION
Third quarter sales in Latin America were boosted by solid like-for-like sales (up 5 percent) and a sustained contribution from new square meters (up 9.4 percent), the company said.
Meanwhile, Carrefour managed to up its market share in all three of its Latin American markets Brazil, Argentina and Colombia, according to the latest earnings report.
In Brazil, Carrefour’s top market in the region, sales grew 14.3 percent to 6.5 billion euro. “All formats turned in very good performances with positive like-for-likes and sustained expansion,” the company says.
Its network of stores expanded in the quarter with the addition of seven new supermarkets that had previously been under the Gimenes banner and the opening of five Atacadao stores.
ARGENTINA AND COLOMBIA
In Argentina, its second-largest market in Latin America, sales grew by 16.3 percent to 655 million euro. “Food continued to perform well in spite of a decrease of inflation, and non-food continued to grow,” Carrefour says.
In Colombia, its third-largest market, sales increased by 12.2 percent to 327 million euro. “With two hypermarket openings and the integration of three Mercadefam hypermarkets that were acquired in 2008, our market share continued to show gains over the quarter,” Carrefour says.
All in all, the third quarter saw the addition of eight hypermarkets, nine supermarkets and 21 hard discount stores in Latin America.
Among the latest – the August opening of three convenience stores in São Paulo after a successful trial of the format in Porto Alegre. The stores, using the Carrefour Express brand, are located in gas stations and are open 24 hours a day. Earlier this year, Carrefour also opened a hypermarket in Porto Alegre. All in all Carrefour now boasts 1,228 stores in Latin America.
Last week, French daily Le Monde reported that Carrefour was considering selling its Latin America unit, but the firm denied those reports. Instead, today it confirmed plans to sell its operations in Russia.
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