Carrefour puts stop to growth plan for Europe

CARREFOUR, Europe’s top retailer, slashed its dividend and investment plans yesterday in anticipation of another tough year of shoppers cutting spending in austerity-hit southern Europe and in its core French market.

The world’s second-biggest retailer behind Wal-Mart halved its dividend to preserve cash and put its plan to revive its European hypermarkets on hold.

Carrefour, posting a 19 per cent drop in 2011 profits in the last set of results under outgoing boss Lars Olofsson, said yesterday it was halting conversions to its new Carrefour Planet hypermarket format beyond 2012 because the results so far had fallen short of expectations.

This will allow the group to focus on a more immediate plan to lower prices to lure back shoppers who cut back on purchases of discretionary non-food items and accelerate its expansion in e-commerce.

“In 2012, we will capitalise on our strengths while exercising strict cost and cash discipline to adjust to the environment in which we are operating,” chairman and chief executive Olofsson said.

Carrefour made an operating profit of €2.18bn (£1.8bn) in 2011. It also halved its dividend to €0.52, worse than the €0.72 expected by analysts.