Carrefour issues profit alert

CARREFOUR has warned its 2011 profits will slump 15 per cent as it cuts prices in a bid to reverse falling market share and tackle an increasingly tough economic environment.

The French retailer said it was scaling back its Carrefour Planet hypermarket revamp as it continued to face headwinds in Greece and Italy.

It also said that high commodity prices had eaten into purchasing savings.

Europe’s largest retailer has spooked investors with four profit warnings in less than a year.

Its latest dire forecast came as it reported an unexpected first-half net loss, hit by €884m (£783.5m) one-off charges linked mainly to writedowns at its Italian business.

“We are biting the bullet in 2011 and rebuilding momentum in 2012 to deliver long-term sustainable profitable growth,” chief executive Lars Olofsson said. He also conceded the firm had made mistakes, such as raising prices in its main French market above rivals such as E Leclerc and Intermarche.