(News Bulletin 247) – In France, like-for-like sales virtually stagnated in the last quarter of 2022, which, given the high inflation in food prices, suggests significant drops in volumes. The fall in supermarket revenues is particularly notable.

The comparison is hard for Casino. The tricolor distribution group unveiled its turnover for the fourth quarter and for the whole of 2022 on Tuesday.

Over the last four months of last year, the company posted growth in its turnover, up 4.4% on a like-for-like basis, i.e. excluding fuel, currency effects, scope and calendar impact. But this growth is above all driven by Latin America, where revenues increased by 12% over one year, on a like-for-like basis.

In France, the dynamics of the group prove to be not very promising. On the France Retail scope – which includes the stores and excludes Cdiscount – turnover fell by 0.3% in published data to 3.63 billion euros and barely stagnated (+0.1%) in comparable data.

A very sluggish performance with regard to food price inflation in France, which exceeded 12% in December and November, for example. And especially against Carrefour: on a comparable basis, the group led by Alexandre Bompard saw its revenues increase by 5.6% over one year in France in the last quarter of 2022.

Supermarkets in trouble

“Casino sales in France are weak, whether in absolute terms, in view of food inflation in France or in the face of Carrefour’s figures”, judges a financial analyst.

In detail, Franprix and convenience stores (Vival, Spar) are clinging on, with like-for-like increases in the quarter of respectively 5.5% and 4.4% over one year.

But the larger store formats are suffering. Hypermarkets saw their turnover plummet by 6.2% like-for-like, supermarkets by 4%. Casino referred to “a more difficult competitive environment at the end of the year, in which the group controlled its promotions and communication expenses”, to justify these cuts.

The poor dynamics of hypermarkets can be explained by Casino’s decision to reorient this format, by converting stores into supermarkets or by turning them towards fresh products, at a time when this market is precisely eroding. This is called “downtrading”, the practice of consumers turning to cheaper and lower quality products to preserve their purchasing power.

“We can understand the fall of hypermarkets, but the problem is that there is no communicating vase effect with supermarkets. The group is probably suffering from significant drops in volumes, finding itself penalized by its high pricing strategy “, judge the financial analyst previously quoted. Carrefour had reported for its part a growth of 3.7% of its hypermarkets and 6% of its supermarkets in France in the fourth quarter of 2022.

Annual results on March 10

On the Paris Stock Exchange, the Casino share dropped 5% around 11:30 a.m. and underperformed the SBF 120 index, which for its part fell by 0.2%.

Over the year as a whole, Casino revenue grew by 5.2% year-on-year like-for-like, again driven by Latin America (+12.3%) while revenue from scope of France Retail gained barely 1.5%.

The market will have to wait a few days, until March 10, to be able to dissect all of Casino’s annual accounts, including its gross operating profit (Ebitda), its cash generation and its debt. These are the most scrutinized financial parameters for the company whose financial situation remains a source of chronic concern (net debt excluding IFRS 15 exceeded 5 billion euros in France at the end of June).

On this date, the group could give more details on the discussions held with Teract, owner of Jardiland and Gamm vert – with a view to a rapprochement. As reported by BFM Business, two weeks ago, a merger with the French brands of Casino is envisaged with in fine, a complex arrangement which would make it possible to reduce the group’s debt, at least face-to-face.