Carrefour lifts capital spend as European consumers revive
By Dominique Vidalon
PARIS (Reuters) - Carrefour (CARR.PA: Quote) is stepping up its multi-billion euro investment in store improvements, hoping to cement a turnaround as yearly results showed it was already benefiting from signs of a recovery in consumer spending across Europe.
Posting higher 2014 profits as a revamp of its European hypermarkets started to pay off, the world's second-largest retailer said it would invest between 2.5 billion euros ($2.8 billion) and 2.6 billion in 2015 on renovating and expanding stores, including those of recently acquired French chain Dia.
This compares with 2.4 billion spent last year on renovating stores in France and Brazil and improving IT and logistics.
"Our turnaround plan and good cost control are bearing fruit," said Chief Financial Officer Pierre-Jean Sivignon. "In Europe we are beginning to see signs of a recovery, notably in Spain. We are very confident on the potential of Europe."
The comments chime with figures on Wednesday showing euro zone retail sales grew a faster than expected 1.1 percent in January compared with December, their fastest rate since May 2013.
Carrefour shares hit a four-year high and were 3 percent higher at 30.59 euros by 9.57 a.m. ET, outperforming a 1 percent rise in their European sector .SXRP.
Its results also echoed figures from Belgium's Delhaize DELB.BR as shares across the sector rose on hopes for a Europe-wide consumer recovery. Analysts said Carrefour could also benefit in France from signs a price war is abating.
Carrefour, which makes 73 percent of its sales in Europe, has suffered from a reliance on the hypermarket format it pioneered as customers shift to more local and online shopping, trends that have caused headaches for British retailers, in particular market leader Tesco Plc (TSCO.L: Quote). Continued...