News from around the globe
French supermarket retailer Carrefour has announced that its turnaround plan is well on track, delivering cost cuts of €1.05 billion in 2018 and a higher free cash flow.
Europe’s largest retailer also reported a 3.4 per cent decline in 2018 operating profit to €1.938 billion, in line with its own guidance. This reflected restructuring charges in its core French market, and was despite a robust performance in Brazil.
Carrefour kept its annual dividend unchanged at €0.46, and said it was now eyeing cost savings of €2.8 billion by 2020 instead of the €2 billion previously targeted.
Carrefour is in the midst of a five-year plan, Carrefour 2022, launched one year ago to cut costs and jobs, boost e-commerce investment and seek a partnership in China with tech giant Tencent in an effort to lift profits and sales and tackle the growing competition from US online retail giant Amazon.
Steinhoff audit on the way
South African furniture and goods retailer Steinhoff has reported a 3 per cent rise in sales to €4.7 billion for the three months ended December 31.
The firm, which is trying to clean up its finances after uncovering an accounting fraud that nearly tipped it into bankruptcy, also said a long-awaited forensic investigation into the problems at the firm by accountants PwC would be delivered to the board within the next couple of weeks.
The audit firm was hired the company to scrutinise its books following the resignation of CEO Markus Jooste.
7-Eleven to open in India
The world’s biggest convenience store chain, the US-based 7-Eleven, expects to open its first branded store in India this year, after reaching a franchise deal with Future Retail to run the chain there.
Future Retail, which operates local retail chains such as Food Hall and Nilgiris, plans to set up 7-Eleven stores from scratch and convert some of its existing operations into the US brand.
7-Eleven, which operates more than 67,000 stores around the world, is the latest global player to make a play for India’s rapidly growing market. The country’s grocery industry is currently worth around US$380 billion, according to a report last year by the US Department of Agriculture.
Neighbourhood family-run stores, where most Indians do their weekly shopping, account for an estimated 98 per cent of the market, CNN Business reports. But Future Group’s modern supermarkets are growing in popularity, and the USDA predicts their share will double from 2 per cent to 4 per cent by 2020.
Single’s Day boosts JD.com
JD.com, China’s second largest e-commerce firm, has reported a 22.4 per cent jump in quarterly sales, beating estimates on the back of robust retail sales, especially in the fourth quarter due to the “Single’s Day” holiday on November 11.
The company said sales for that event peaked at 159.8 billion yuan.
The results, however, still represent its slowest quarterly revenue growth rate since its 2015 initial public offering, as an economic slowdown hits China’s top e-commerce companies.
Analysts and executives in the industry have pointed to lower sales of big ticket items, including smartphones and appliances, as the driving factor behind slower sales growth on JD.com and competitor Alibaba.
JC Penney pleases investors
Struggling US retailer JC Penney has reported results for the fourth quarter that topped estimates as sales lifted during the Christmas period, especially in jewellery and apparel.
Its shares surged as much as 31.5 per cent on the news, despite a 9.5 per cent drop in total net sales for the year to US$3.67 billion from $4.05 billion the year before. Net income totaled $75 million, compared with US$242 million in the same period last year.
In early February, the 116-year-old company announced it would stop selling major appliances including refrigerators and washing machines, and revamp store layouts.
Nordstrom discounters lift sales
US department store operator Nordstrom has reported better-than-expected quarterly profit, as customers bought more merchandise at its off-price stores and less at its full-price stores.
Nordstrom’s fourth-quarter net income rose to US$248 million, compared with US$151 million a year earlier. That beat Wall Street’s average estimate of US$1.42 per share.
The Seattle-based retailer has invested in its website, apps and a loyalty program, while also building out its Nordstrom Rack stores that sell off-price merchandise in the US and Canada.
The off-price business gained seven million new customers last year and Nordstrom said it expects about one-third of off-price customers to cross-shop in the full-price business within a year.