Carrefour relatively upbeat despite weak sales

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Carrefour relatively upbeat despite weak sales

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Carrefour has said that while trading remained weak in Europe’s austerity-blighted countries, it was not getting worse.

That cheered investors fed up with profit warnings from Europe’s biggest retailer.

The French group – which pulled out of Greece last month – has big operations in some of the countries worst hit by the eurozone crisis.

Spain, Italy and France accounted for 61 percent of its sales in the second quarter of 2012.

The arrival of Georges Plassat, a retail veteran who took over in May, has fuelled hopes Carrefour can finally get to grips with years of underperformance in its main European markets, where its hypermarkets have been hit by competition from specialist stores and trends towards local and online shopping.

However, Plassat faces a tough task against a weak economic backdrop. Retailers across much of Europe are struggling as shoppers’ disposable incomes are squeezed by rising prices, muted wage growth and government austerity measures, while confidence is sapped by the eurozone debt crisis.

Quarterly like-for-like sales excluding petrol fell 7.4 percent in Spain and 4.3 percent in Italy.

However, the downward sales trend slowed in Spain in the second quarter from the first quarter, and in Italy, non-food hypermarket sales were improving, Carrefour said.

In emerging markets, China continued to struggle but non-food sales were recovering, while Brazil, now Carrefour’s second-largest market after France, put in a strong performance.