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Tough times hit Carrefour's plans

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Tough times hit Carrefour's plans
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Carrefour has cut it dividend payment to shareholders in half in anticipation of another tough year in its home market, France, and throughout austerity-hit southern Europe

The region’s top retailer, and the second largest in the world behind Wal-Mart Stores, posted a 19 percent drop in profit last year and has halted plans to revamp its hypermarkets.

Instead it will cut prices to lure back shoppers and accelerate its attempts to sell via the internet.

“In 2012, we will capitalise on our strengths while exercising strict cost and cash discipline to adjust to the environment in which we are operating,” Chairman and Chief Executive Lars Olofsson said.

The company, which under Olofsson has failed to reverse years of underperformance in its main European markets, made an operating profit of 2.18 billion euros in 2011.

The chain is heavily exposed to some of Europe’s weakest markets – such as debt-laden Spain, Italy and Greece – where shoppers have been cutting back on non-food items.

Carrefour’s downsizing plans came after Britain’s Tesco, the world’s third-biggest retailer, said in January it would cut back openings of big hypermarkets and focus on faster-growing smaller stores and the Internet.