Carrefour’s plan to accelerate its turnaround

Carrefour unveiled plans on Tuesday to step up expansion in e-commerce, open more discount stores and cut costs as part of Chairman and CEO Alexandre Bompard’s new strategy to accelerate the turnaround at Europe’s largest food retailer amid soaring inflation.

Here are the main planks and financial targets announced in the 2026 strategy presentation to investors.

Carrefour is targeting annual capital spending of 2.0 billion euros ($2 billion), up from 1.7 billion euros previously, and net free cash flow above 1.7 billion euros by 2026. It is also aiming for 4 billion euros in cost savings by that date. It pledged to improve its operating margin as well as sustained growth in recurring operating income.

The group confirmed e-commerce initiatives announced in November 2021 and the objective of 10 billion euros in e-commerce Gross Merchandise Value by 2026.

Carrefour will continue to pay a cash dividend and increase it by at least 5% a year while continuing a share buyback policy started in 2021 and seize medium-sized acquisition opportunities.

To help customers better cope with soaring inflation Carrefour plans to raise to 40% the share of Carrefour-branded products in its food sales in 2026 from 33% in 2022.

The group will also accelerate its discount store openings, targeting more than 470 Atacadão Cash and Carry stores in Brazil in 2026, up 200 from 2022, and the launch of its first Atacadão store in France in autumn 2023.

Carrefour will also continue to develop its Supeco discount store format, particularly in Spain, to reach 200 stores by 2026, up 80 from 2022.

The group is also targeting 2,400 convenience store openings by 2026, mainly through franchising.

In France, Carrefour said it had identified around 100 sites that could be transformed into housing, offices or stores. It plans to carry out these conversions between now and 2030, in partnership with developers currently being selected.

It said the identified potential was 1.5 million square meters to be built, with an estimated value creation potential of around 500 million euros.

In Brazil, Carrefour said it would place its real estate assets (Carrefour, Atacadão and BIG) in a real estate company that should be the largest private property company in South America. Carrefour plans to open that company’s capital to minority partners to support its future development.

($1 = 1.0006 euros)