Carrefour Q1 results: five key takeaways

Date : 23 April 2021

Carrefour reported turnover rose 2.2%, at constant exchange rates, to €18.56 bn. Its performance in Latin America and Asia drove top line growth, while in like-for-like terms the retailer saw a benefit from its operations in France and Latin America. Its first quarter results enabled it to confirm its operational and financial objectives, which it laid out as part of its 2022 strategic plan.

The numbers:

Carrefour reported that:

  • Total Group sales +2.2% to €18.56 bn, like-for-like sales were +4.2%
  • Sales in France fell 1.4% to €9.16 bn, like-for-like sales were up +3.5%
  • Sales in Europe fell 2.6% to €5.47 bn, like-for-like sales were down 1.6%
  • Sales in Latin America +17.2% to €3.3 bn, like-for-like sales were up +15.7%
  • Sales in Asia +6.7% to €0.66 bn, like-for-like sales were down 6.4%

1. Positive performance in France underlines ongoing improvements

In its key home market Carrefour reported strong like-for-like growth across all formats, including a rise of 3.3% at its hypermarkets and 7.0% at its supermarkets. Non-food sales increased 10.8%, while food sales were up by 1.7% at its hypermarkets. The retailer said the success was being driven by its focus on shoppers, ‘especially with the “5/5/5” approach’, while the TOP project has been deployed at ‘around 90% of hypermarkets and more than 100 supermarkets to date’.

2. Focus on growth formats proving successful

Although implementing and driving an omnichannel strategy, Carrefour has put an emphasis on expanding with certain formats. In Q1 2021 it said it had added or opened 559 convenience stores, which included the acquired Bio c’Bon, Wellcome and some Supersol stores, nine Atacadão and 20 Supeco.

In its home market Carrefour reported its convenience stores had seen a rise in like-for-like sales of 4.1% on a two-year average, with particularly strong growth in January and February. In Brazil, its Atacadão banner saw sales rise 17.5% at constant exchange rates, with like-for-like sales rising 12.9% and new store openings aiding growth by 6.0%.

3. Grocery ecommerce goes from strength to strength

Underlining both the benefits of its investment in the channel and growing shopper acceptance of buying online, Carrefour reported sales had risen 56% at a group level, after seeing an advance of 45% in Q1 2020.

Specifically in France it reported that GMV rose by 51%. To help sustain this pace of growth the retailer said it was ‘accelerating its rollout [of] a partnership with Deliveroo, and by raising to 2,000 the number of stores or contact points offering Carrefour ecommerce services by end-2021’. In Brazil it reported that food ecommerce sales increased by 140% in the quarter, while in Romania the channel had enjoyed ‘strong momentum’. The pace of growth enabled Carrefour to confirm its target of generating €4.2 bn in food ecommerce GMV in 2022.

4. Acquisitions support growth outlook

Carrefour completed the acquisition of Supersol in Spain in March, which it said should generate an ‘additional EBITDA of around €50m by 2023’. In Brazil, the retailer opened nine Atacadão stores, of which five were conversions of acquired Makro stores. Finally, in Taiwan acquisitions contributed growth of 15.5% following the integration of ‘the recently-acquired Wellcome stores’.

Looking to the future, the retailer highlighted its acquisition of Gruppo BIG, Brazil’s third largest food retailer. While the acquisition is not expected to close until 2022, Carrefour believes it ‘offers significant synergy potential from the first year, gradually ramping up to reach a net EBITDA contribution of BRL1.7 bn (around €260m) on an annual basis three years after the effective completion of the transaction’.

5. COVID-19 related challenges continue to affect some markets

However, underlining the on-going effects and impact of COVID-19, Carrefour’s positive performance was not uniform on a global basis. In Italy like-for-like sales fell 11.3% in Q1 2021, while they were down 4.4% on a two-year average basis. It said on-going traffic restrictions and the closure of shopping centres affected performance. The latter point was also felt in Poland, where like-for-like sales were down 2.3% in Q1, although they were up by 3.3% on a two-year average basis.