Carrefour: After Walmart, a nasty surprise for French wholesalers?

(BFM-Börse) – The price increase is beginning to weigh on household consumption and the results of the brands concerned. Walmart just slashed its quarterly and annual earnings forecasts as inflation has shaken its customers’ habits. A new alarm signal for the entire distribution industry, which is increasingly threatened by rising prices.

U.S. supermarket chain Walmart sharply cut its quarterly and annual profit forecast on Monday as inflation drives customers to spend more on groceries and gas and less on other goods, usually at higher premiums.

The group must therefore offer discounts on commodities other than groceries and gasoline in order to sell its inventory, which is affecting its profits, according to a press release. The discounts have particularly affected clothing.

Walmart expects its operating profit to fall 13% to 14% in the second quarter of its fiscal year, which ends in late July, where flat or even a slight increase was previously expected. The supermarket chain is forecasting an 11% to 13% decline in operating profit for the year, much more than the 1% decline previously expected.

For its part, sales should be higher than initially expected: the group expects sales growth of around 7.5% in the second quarter of its fiscal year ending at the end of July and 4.5% for the year compared to 5% and 4% respectively before.

Walmart’s action, which is due to announce its final results Aug. 16, fell more than 9% in electronic trading after the New York Stock Exchange closed.

Inflation that ‘complicates things’

Retail brands, whether specialized or not, expect consumers to adapt their consumption habits and further limit their so-called non-essential purchases, especially when it comes to clothing or household appliances. “Inflation in Europe is expected to remain at high levels through the end of the year, which will weigh on consumer confidence and demand in the furniture and decoration sector.” May.

Carrefour, which is due to publish its second quarter sales and half-year results on Wednesday 27th July, has not failed to recall its commitment to “preserving the purchasing power of consumers” by offering “a reinforced range of products which is easily accessible Easy’ the promotion, as well as a loyalty program that will make it possible to emphasize the competitiveness of the group’s brands”. Arguments that are far from convincing for Invest Securities. In a recent communication addressed to the French distributor, the analyst expects Carrefour’s mid-year results to hold up “in a context where inflation ultimately complicates things,” not all of their promises.

In anticipation of the ruling, Carrefour sold less than 1% on Tuesday while Casino returned nearly 5.1%, with the Saint-Etienne distributor still struggling with its hefty debt. Maisons du Monde was not spared the market’s distrust of distribution and lost 5.8%.

(With AFP)

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