For several quarters now, the French company has posted an increase in sales even after the impact of exchange rates - in part due to the improvement in the rates, of course, but also to better performances from its various overseas subsidiaries and from a continued high rate of expansion.
Carrefour's latest results show further progress. Full year group sales were some 6 per cent higher at €79 billion, excluding the currency effect, but even taking this into account, the company posted a creditable 2.9 per cent increase in sales.
Ironically, it was the domestic market which struggled the most in 2003, in particular in the final quarter of the year, with sales in the last three months of the year rising just 0.5 per cent to €10.8 billion. For the year, sales were ahead by 2.1 per cent at €40 billion.
Carrefour said that while its hard discount and supermarket operations in France had shown excellent growth during the year (12.1 per cent to €2 billion and 3.5 per cent to €8 billion, respectively), the hypermarket business had suffered, with a 1.8 per cent decline in sales in the final quarter leading to full year growth of just 0.2 per cent to €21.4 billion.
A poor performance from the non-food business at the hypermarket arm due to the weakness of the French economy was blamed for the poor growth figures.
Outside of France, sales in the rest of Europe were ahead 8.2 per cent for the year at €28.4 billion, with strong showings in every country - Spanish sales rose 8.5 per cent to €12 billion, Italian turnover was 9.4 per cent higher at €6.5 billion, while Belgian revenues reached €4.6 billion, a 3.5 per cent increase.
Asia is one region where currency exchange rates have had a negative impact in the past, but Carrefour ended 2003 with sales after currency exchanges ahead of the previous year, albeit by just 0.4 per cent. This was partly due to a strong final quarter, with growth of 7.4 per cent overall and 1.5 per cent on a like-for-like basis.
China was the best-performing market for Carrefour in Asia, with like-for-like sales up 3.2 per cent for the year and new store openings contributing 29.4 per cent to leave total sales some 10.9 per cent higher at €1.3 billion. This came despite the fact that eight hypermarkets, scheduled to open at the end of the fourth quarter, were delayed and will now open in the first quarter 2004.
This rapid growth in China, and the successful like-for-like improvements, helped offset the more difficult conditions in other markets, with Taiwan in particular struggling to cope with tough economic conditions, posting a 14.3 per cent drop in sales to €1.8 per cent. Despite an overall drop of 1.9 per cent, Korean sales were lifted by aggressive price promotions during the year.
But it is Latin America which continues to blot Carrefour's copybook, even if there have been major improvements there too. Total sales for the year were 11.9 per cent lower at €5.6 billion, but this masked a 4.9 per cent improvement in like-for-like sales and expansion gains of 6.2 per cent.
The company said it had adopted a strategy of 'clusterisation' - developing formats adapted to the purchasing power of the catchment area of each store - and that this had led to the like-for-like sales improvements of 1.7 per cent in Argentina in particular. In Brazil, where Carrefour recently withdrew from the race to acquire the assets of Dutch counterpart Ahold, like-for-like sales were up 7 per cent, despite ongoing recession, driven by good performances in particular from the hard discount outlets.
With such impressive growth, particularly at the like-for-like level, Carrefour is effectively showing the benefits of its multi-format approach. Discount stores work very well in countries such as Argentina, Brazil or even France, where economic conditions are tough, offsetting declines at other formats.
But even Carrefour cannot get it right all of the time, as its recent decisions in Latin America show - the decision to sell its Chilean unit, despite growth of 2.9 per cent, including currency effects, is a reflection of the company's failure to understand the requirements of the Chilean market, at least according to Fernando Martino, business manager at the DKSH consultancy in Chile.
"No foreign retailers have been able to succeed in the Chilean market," he said. "Home Depot had to quit a couple of years ago, the same as JC Penney and now Carrefour. There are no foreign retailers in Chile. The common factor is the lack of knowledge of the purchasing habits and behaviour of the Chilean consumer. Carrefour could not grow because it was not competitive and could not add value."
According to reports in the Chilean press, Carrefour has said that it decided to withdraw as a result of its failure to achieve its goal of becoming the third largest food retailer in Chile, despite its relatively good performance there. Its success in other markets has been built on adapting to the demands of local consumers, but for some reason it appeared to be unable - or, as it has just six stores there, unwilling - to invest in this strategy in Chile