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PARIS (Reuters) -Carrefour will step up its expansion into e-commerce, slash costs and focus on cash generation as part of boss Alexandre Bompard’s new strategy to accelerate the turnaround at Europe’s largest food retailer amid soaring inflation.
The French group, ahead of an investor presentation later on Tuesday, said it was aiming for a net free cash flow of over 1.7 billion euros ($1.7 billion) and 4 billion euros in cost savings in 2026.
To help customers with the soaring cost of living, it vowed to boost the share of private label products in its food sales to 40% in 2026 from 33% in 2022 and to accelerate expansion of discount stores in its key French and Brazilian markets.
As a result, Carrefour (EPA:CARR) said it was raising its annual investment target to 2.0 billion euros from 1.7 billion euros previously.
Chairman and CEO Alexandre Bompard, who took the helm in July 2017, was reappointed in May 2021 for another three years.
He faces the challenge of delivering the second leg of the group’s turnaround amid an inflationary environment made worse by the war in Ukraine and without the extra financial resources that would have been on hand if two planned tie-ups last year had not failed – one with Canada’s Alimentation Couche-Tard and another with France’s Auchan.
The new plan builds on targets announced in November 2021 to spend 3 billion euros between 2022 and 2026 to step up expansion in digital commerce in order to triple e-commerce Gross Merchandise Value (GMV) – or the total value of merchandise sold – to 10 billion euros in 2026 as Carrefour looks to stay ahead of Amazon (NASDAQ:AMZN) on grocery delivery.
($1 = 0.9996 euros)
