Carrefour has reported its third-quarter (Q3) results for 2024, revealing a mixed performance across its global operations.
Despite impressive overall sales growth, primarily driven by Latin America, the retail giant’s European markets, including its home country of France, continue to struggle.
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Latin America powers overall growth
According to GlobalData’s Senior Retail Analyst, Eleanor Simpson-Gould, Carrefour’s Q3 results “appear impressive” on the surface, particularly due to the strong performance in Latin America.
Group sales rose by 8.8% year-on-year, but the momentum has slowed since the 10.8% increase seen in Q2. Carrefour’s operations in Brazil have been particularly strong, thanks to a shift towards popular formats like Atacadão and Sam’s Club. This has helped offset weaker performances in Europe.
Simpson-Gould noted that Carrefour’s Brazilian operations, which have benefited from repurposing stores, “performed well and offset the grocer’s weak European sales.”
This aligns with Carrefour’s strategy of tailoring its retail model to local markets, which in Brazil has paid off significantly.
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By GlobalDataEurope struggles to keep pace
In stark contrast to Latin America’s success, Carrefour’s European markets, particularly France, have faced challenges.
“Like-for-like sales in France were down 3.0% in Q3 FY2024,” Simpson-Gould said, although this was a slight improvement over the previous quarter’s 3.5% decline.
This has been attributed in part to economic uncertainties and inflationary pressures in key markets like France and Spain, which have led consumers to tighten their belts.
Romania emerged as a bright spot in Carrefour’s European operations, with a modest 1.5% growth in like-for-like sales. However, the company’s performance in Spain, Italy, Belgium, and Poland was disappointing, contributing to an overall 1.5% decline in European sales.
Addressing consumer concerns
One of the key challenges Carrefour faces in Europe is convincing consumers that it offers value for money. “Carrefour must do more to entice sales in Europe as concerns regarding consumers’ financial situations remain heightened,” Simpson-Gould explained.
She pointed to consumer concerns in Poland, where over 92% of consumers are worried about their financial future, and in Spain, where that figure stands at 61%.
To turn things around, Carrefour may need to be “more aggressive on pricing to encourage spending from wary consumers and improve sales of private label products for the holiday period.”
The upcoming holiday season, often referred to as the ‘golden quarter,’ will be critical for Carrefour’s European recovery. The retailer will need to offer compelling deals and ensure it is meeting the needs of cost-conscious shoppers to drive stronger sales growth.
Looking ahead
As Carrefour enters the final quarter of 2024, its performance in Latin America will likely continue to be a significant growth driver, but the retailer will need to address the persistent struggles in its European markets to balance global performance.
Whether Carrefour can regain momentum in Europe may depend on its ability to respond to shifting consumer behaviours and economic conditions across the region.
For now, Carrefour’s mixed Q3 results reflect a retailer that remains a powerhouse globally but faces growing challenges closer to home.
