France's Carrefour says plans 2010 entry into India

France's Carrefour says plans 2010 entry into India

(AFP) – 4 hours ago

NEW DELHI — France's Carrefour, the world's second largest retailer, said Friday it plans to enter India's vast retail market in 2010 following years of delays.

"Carrefour will develop its activities in India with the start of cash-and-carry activities in 2010," the company said in a statement emailed to AFP.

Cash-and-carry is the term used for wholesale outlets.

Carrefour, number two behind US retail giant Wal-Mart, added in the statement it had been "discussing partnerships" with some Indian companies but that it did not wish to divulge names.

The company has been scouting for years for Indian partners. Retail tycoon Kishore Biyani has often been mentioned and Carrefour and his Future Group were linked most recently in an Indian media report in January.

India's estimated 500-billion-dollar retail sector is seen as having high growth potential but it remains tightly regulated with large retailers accounting for around six percent of industry sales.

Carrefour had previously said it planned to have an Indian franchisee which would open branded hypermarkets in the country. It had said Carrefour's 100-percent-owned cash-and-carry business would supply these stores.

Under India's tight foreign investment rules, no foreign chains are permitted in the retail sector -- except for single-brand outlets such as Nokia or Reebok -- to protect local retail players.

Foreign groups can only be wholesalers and must partner with domestic companies to enter the retail market.

Last year, Wal-Mart opened its first sales venture in India, teaming up with Bharti Enterprises, parent of India's biggest mobile firm Bharti Airtel, in a wholesale joint venture called Best Price Modern Wholesale.

Carrefour's announcement came as the retailer reported separately that net profit tumbled in 2009 by 74.2 percent to 327 million euros (505 million dollars), hit by huge restructuring charges.

Wal-Mart suffers sales decline in key quarter

Wal-Mart suffers sales decline in key quarter
By Parija Kavilanz, senior writerFebruary 18, 2010: 12:17 PM ET


NEW YORK (CNNMoney.com) -- Wal-Mart Stores posted a quarterly profit Thursday that beat Wall Street's expectations, but the retailer's store sales dropped during the period that included the all-important year-end holiday sales.

Wal-Mart, the world's largest retailer, said fourth-quarter sales at its stores open at least a year - a key gauge of retailers' performance known as same-store sales - fell 1.6% compared to a 2.4% increase for the same period a year ago.

For the full year, Wal-Mart (WMT, Fortune 500) said its same-store sales were flat compared to a 2.8% increase last year.

"I am disappointed that [our] U.S. comparable sales were below expectations in the quarter," Wal-Mart CEO Mike Duke said during a pre-recorded call to discuss the company's results.

"The economy is a real challenge for many of our customers," he added, warning that Wal-Mart's first-quarter sales "will be difficult" due to tougher year-over-year sales comparisons and ongoing price deflation in some of its key merchandise categories including food and electronics.

"We believe we will see improvements as the year progresses," Duke said in the call.
Fewer shoppers

Wal-Mart, which averages more than 100 million shoppers to its stores every week, is often seen as a barometer of the state of consumer spending.

Therefore its sales decline will likely raise concerns that consumers still aren't shopping freely. That's a troubling sign, given that consumer spending fuels two-thirds of the nation's economic activity.



Eduardo Castro-Wright, vice chairman of Wal-Mart stores, said during the call that the same-store sales decline was fueled by a "slight drop in [customer] traffic to Wal-Mart stores in the fourth quarter" as well as a decline in the total value of purchases that customers were making at Wal-Mart.

Grocery and consumer electronics were impacted the most by price deflation while sales of health and wellness, and pharmacy products were strong, said Castro-Wright.

Wal-Mart said it expects same-store sales to be flat to "plus or minus 1%" in its first quarter.

At the company's Sam's Club division, same-store sales rose a slight 0.7% in the quarter and were up 1.4% for the full year.

Wal-Mart said it expects same-store sales at its warehouse club division to also be "flat, plus or minus 1%" in the first quarter as membership renewal rates continue to be flat.

Wal-Mart's international operations - including Brazil and China - delivered the best performance in the quarter. The company said Wal-Mart International ended fiscal year 2010 with more than $100 billion in net sales and "strong double-digit sales growth" in the fourth quarter.
By the numbers

The retailer said profit climbed to $4.7 billion, or $1.23 a share, during its fourth-quarter ended Jan. 31.

Excluding certain one-time charges, Wal-Mart reported earnings of $1.17 per share. Analysts polled by Thomson Reuters, who typically strip out one-time charges, were expecting a profit of $1.12 a share for the three months ended Jan. 31.

Sales at Wal-Mart increased 4.6% to $112.8 billion during the quarter. Analysts expected revenue to climb 5% to $114.4 billion.

For the full year, Wal-Mart reported an 8.8% jump in profit to $14.4 billion, and sales rose 1% to $405 billion.

The Bentonville, Ark.-based company expects to earn between 81 cents and 85 cents per share for the current quarter, while analysts expect the company to earn 85 cents per share.

For the full fiscal 2011 year, Wal-Mart expects to earn between $3.90 and $4.00 per share compared to analysts' current estimate of $3.97 per share for the year.

Shares of Wal-Mart (WMT, Fortune 500) declined less than 1% in pre-market trading.

--CNNMoney.com staff writer Hibah Yousuf contributed to this report. To top of page