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Carrefour profits from recovery plan

Carrefour profits from recovery plan
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Carrefour’s shares surged after the world’s second biggest retailer posted a sharp improvement in earnings at its core French business.

Its first-half recurring operating profit rose 4.9 percent to 766 million euros as a turnaround plan launched by new Chief Executive Georges Plassat started to pay off.

Carrefour’s shares are up 48 percent since Plassat’s arrival in May 2102.

He has cut costs, renovated ageing stores, improved price competitiveness and simplified the product range.

There was 75.4 percent leap in operating profit in France, where the group makes more than 40 percent of sales.

There was a fall in profitability in the rest of Europe, dragged down by austerity-hit Spain and Italy.

Carrefour has struggled for years in Europe, partly due to a reliance on the hypermarket format it pioneered as time-pressed customers shop more locally and online and buy non-food goods from specialists.

Many retailers across Europe are struggling as consumers’ disposable incomes are squeezed by rising prices, muted wages growth and government spending cuts.