April 12 - Europe's biggest retailer Carrefour has reported a plunge in demand for discretionary purchases like clothing and electricals and a deteriorating performance at its core French hypermarkets. Hayley Platt reports.
Europe's top retailer Carrefour is feeling the pain from austerity-hit shoppers. It's reported a slump in non-essential goods like clothes and electricals as shoppers cut back on spending. It's core French hypermarket business was hardest hit - sales there fell 5.8 percent. Overall sales for the group made $29.5 billion dollars in the first quarter - a year-on-year rise of 1.5 percent. Retailers across much of Europe are struggling as shoppers' disposable incomes are squeezed by rising prices and stagnant pay packets. Jens Larsen from RBS Capital Markets says it's a mixed picture but he's optimistic about the future. SOUNDBITE: Jens Larsen, Chief Economist, RBC Capital Markets, saying (English): "It's pretty obvious that households in Spain and Portugal are not going to be out there spending like mad or building up further credit but I would say in the core, particularly in Germany I think we are in a place where we could see much stronger consumption growth than we have seen in the recent past and without that we will be in trouble, that's absolutely necessary to rebalance European growth." The retailer fared better in Brazil where the economy is booming but struggled in China where growth is showing further signs of slowing. Carrefour is the world's second biggest retailer, after Walmart. The weak first-quarter sales highlight the size of task facing the group's new CEO Georges Plassat - who takes the helm in June. The focus now will be on driving down costs in a bid to lure back shoppers. Hayley Platt, Reuters