Carrefour sees consumer confidence improving as price cuts boost sales
Adds details on price cuts in paragraph 6, French tax increase in paragraphs 10 and 11
By Dominique Vidalon and Helen Reid
PARIS, Oct 23 (Reuters) -Carrefour CARR.PA, Europe's largest food retailer, said on Wednesday that shoppers are buying more organic and branded products, in a sign of stronger consumer confidence helping its sales improve in the third quarter.
Carrefour stuck to its annual financial targets and said price cuts have helped it win back market share from rivals in France.
Supermarkets across Europe have been under strain as inflation drives consumers to cut back on groceries and seek bargains at discount chains. In France, Carrefour faces tough competition from market leader Leclerc, a private company.
Carrefour's third-quarter group sales reached 23.983 billion euros ($25.85 billion), marking like-for-like annual growth of 8.8%, in line with market expectations for 8.6% growth.
"We are seeing the first signs of positive change in consumer behaviour," said Carrefour Chief Financial Officer Matthieu Malige.
Since the start of the year Carrefour has lowered prices by more than 10% on 2,000 everyday products, Malige said. He declined to say whether Carrefour would keep lowering prices at the same pace next quarter or beyond.
In France, which accounts for around 45% of Carrefour's revenue, sales were down 3% like-for-like in the third quarter compared to a 3.5% fall in the second quarter.
In Europe sales fell by 1.5%, an improvement from a 2.7% decline in the second quarter. Sales in Brazil grew by 5.8%.
It is too early to assess the impact on Carrefour of France's planned corporate tax hikes, Malige said. Prime Minister Michel Barnier's 2025 budget bill includes a temporary surtax on groups with revenue of more than a billion euros.
Carrefour CEO Alexandre Bompard last week called the tax hikes "confiscatory" and said they would hurt growth.
Carrefour reiterated 2024 financial objectives for growth in Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA) and Recurring Operating Income (ROI) and net free cash flow in line with its 2026 plan trajectory.
It also confirmed its cost savings target for 2024 of 1.2 billion euros and said it had achieved 616 million euros out of the 700 million euros in share buybacks planned for 2024.
($1 = 0.9279 euros)
Reporting by Dominique Vidalon, Helen Reid; editing by Tassilo Hummel and David Evans
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