Carrefour warns on sales

The world's second largest retail group, which has a significant presence in the UAE, has cut its sales growth target two months after implementing an emergency plan.

PARIS // French retail giant Carrefour on Wednesday said it expected sales growth of 6.5 per cent in 2008 at constant exchange rates, down from a previous target of around 7 per cent. The board of directors of the world's second-largest retailer met to review the action plan implemented over the last two months, and said its new sales target was "broadly in line" with its earlier objective. Carrefour said it would continue its "aggressive promotional policy" given the deteriorating global consumption trends it had seen over the last weeks, particularly in Europe.

The chief executive, Jose Luis Duran, said he expected the group to post sales growth of around 3 per cent in the fourth quarter. He added that he had not yet seen any short-term positive impact from changes in inflation rates and oil prices, but that he expected to see a positive effect in the medium- to longer-term. Duran said that he had noted a "certain slowdown" in non-food sales in China, where the group generated sales of ?2.96 billion (15bn) in 2007, out of global sales of ?92.272 billion, but that food sales were still "pretty positive".

The group said in a statement that it expected to meet its target of ?1.5 billion of operational free cash flow, compared with 2007's level of ?691 million. The board was meeting for the last time in the presence of Duran, who is due to be replaced as chief executive by the former marketing head of Switzerland's Nestle, Lars Olofsson. *Reuters