Carrefour and Ahold struggle to win over investors as market gets tough

 
City A.M. Reporter
EUROPE’S biggest retailer Carrefour and Dutch peer Ahold, struggled to convince investors yesterday with steps aimed at boosting their share prices against tough trading conditions.

Carrefour, hit by two profit warnings last year, detailed plans to spin off discount chain Dia and 25 per cent of its European property arm.

It believes this will allow it to focus on turning around its European hypermarket business and expanding in fast-growing emerging markets, while also unlocking value for shareholders from its real estate business.

However, Espirito Santo analysts described the plan as “cosmetic spin” and were disappointed by the lack of detail in the French group’s forecast to grow sales and profits this year.

Ahold, which runs Dutch market leader Albert Heijn but makes about 60 per cent of its sales in the US, announced a bigger-than-expected programme to buy back €1bn (£858m) of shares over 18 months, and hiked its dividend. But it also missed forecasts with a 14 per cent drop in fourth-quarter operating profit to €295m, saying it failed to pass on the full effects of higher food prices to cash-strapped shoppers.

Ahold reiterated its long-term goal to grow both net sales and margins by five per cent.