French retail giant Casino has booked a 35% jump in third-quarter sales, boosted by a strong international showing and a contribution from acquisitions.
In a sales update released yesterday (15 October), Casino said group sales increased to EUR11.8bn (US$15.2bn) in the three months to end September.
The majority of the top line gain was driven by the group's move to take full ownership of Brazilian retailer CBD, also known as Grupo Pao de Acucar. In June, Casino was able to acquire the outstanding stake it did not already own in CBD, ending a highly publicised battle over ownership with Casino's Brazilian partner and CBD founder Abinio Diniz.
Stripping out acquisitions and currency exchange, like-for-like sales rose 4.2%. Sales gains were lead by expansion in emerging markets: Latin America saw sales up 9.6% and Asia booked sales growth of 10.2% on an organic basis.
However, problems persisted in Casino's domestic business. The company described demand in France as "sluggish" and revealed that sales in the market grew just 0.2%. The company said that - in a highly competitive pricing environment - it is looking to keep a lid on running costs while simultaneously opening stores to stimulate growth.
The now familiar story of weak trading in European markets highlights the strength of Casino's broad footprint in high-growth developing markets. Compared to many of its European peers, international sales represent a high proportion of group sales - over 60%. This means that Casino is well-placed to weather the eurozone crisis. Meanwhile, Casino's ongoing investment in its French operations will also position the group well when the French economy returns to growth.
