Retailer Casino's Q1 sales rise as French hypermarkets improve

French supermarket retailer Casino posted a 3.1 percent rise in first-quarter sales on Tuesday that reflected stronger sales at its Geant Casino hypermarkets and a resilient performance in Brazil despite food inflation.

Casino, whose credit rating was cut to junk by Standard & Poor’s in March 2016 and which has been criticised by U.S. activist fund Muddy Waters, is under pressure to show it can revive sales and profits in France as conditions in Brazil remain tough.

Casino, which controls Brazil’s Grupo Pao de Acucar , posted first-quarter sales of 8.9 billion euros ($11 billion), in line with analysts expectations for sales of 8.89 billion euros.

Excluding acquisitions, currency effects and revenue on fuel, sales rose by 3.1 percent against 3.2 percent growth in the fourth quarter of 2017.

In France, Casino has cut prices at Geant hypermarkets and reduced retail space for non-food items in response to competition from online and smaller convenience stores. It has also increased its focus on organic and fresh food products.

Same-store sales at the Geant Casino hypermarkets in France rose 2.1 percent, an acceleration from 0.3 percent growth in the fourth quarter of 2017, while the group’s Monoprix, Franprix and Casino-branded stores also posted robust performances.

In Brazil, the group’s performance was helped by the success of a cash-and-carry format despite food deflation.

Casino’s quarterly performance marked a stark contrast with that of larger rival Carrefour whose French hypermarket sales turned negative again in the quarter amid stiff competition and strikes during the Easter holiday.

Casino, which faces intense competition in France, has also begun talks on a forming a partnership regarding the purchasing of food and non-food items with domestic rival Auchan. 

Last month, Casino’s upmarket Monoprix chain also became the first local retailer to agree to sell groceries via Amazon.

$1 = 0.8076 euros