Carrefour: the hill gets tougher to climb

研报英文原文证据摘录

Carrefour: the hill gets tougher to climb

ntina delivered +23.5% LFLs in a challenging environment.

KEY TAKEAWAYS FROM PRESENTATION

• Management reiterated their commitments to price investment, although they do not intend to be the price leader in

the market. We think this is challenging as players Carrefour have overtaken in terms of pricing continue to see share gains

and therefore remain a credible threat even though Carrefour has gone from being a #4 player on price to #2. We think that

the price investment strategy is unsustainable to driving share gains as once these investments taper off, we would expect

Carrefour to see switching losses.

• The competitive environment remains rational, and there is no indication of an escalating price war. Competitors have not

materially stepped up their price investments in response to Carrefour’s.

• Cora and Match remain a significant drag on profitability (and have done since the deals closed in Jul-24), although

Management emphasized performance was in line with their expectations. Losses amounted to €-75m (vs. €-80m the year

before), not helped by the disposal of six stores, which were actually profitable. Management believes the most disruptive

phase of the integration is now complete and one-off integration costs have now all been completed, which should support

their trajectory to being close to break-even by year-end. We remain skeptical, as this would require a meaningful inflection in

these stores’ profitability to achieve that.

• The consumer in France is resilient, and food volumes have not been significantly affected as consumers continue to

spend on groceries. Geopolitical uncertainty hasn't seemed to heavily weigh on consumer sentiment and Management would