French grocer Carrefour has reported a rise in operating profits as its European business starts to bear fruit. Its full-year profits rose 6.7% to €2.39 billion in 2014, driven by its ‘back to basics’ strategy as it strives to win back customers wooed away by e-tailers and local shopping destinations, particularly in France.
In 2012 it set out its turnaround plan, which included selling stores in a number of overseas markets to concentrate on its French operation. Carrefour’s French business, accounting for around half of all group sales, saw operating income rise 6.1% to €1.27 billion.
The figures saw Carrefour increase its capital expenditure, splashing out €2.6 billion on revamping stores across Europe, including those acquired from Spanish discounter Dia. Overall, Carrefour reported sales of €74.7 billion, down 0.2% year-on-year, while net income rose 0.2% to €1.37 billion.
Carrefour witnessed mixed response in the emerging markets. Recurring operating income from Carrefour stores in Brazil and Argentina soared 23.2%, but Latin American revenues overall only rose 0.8% to €13.89 billion. On the other hand, its performance in China was disrupted by the frugal consumption environment.