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Carrefour ramps up price cuts to boost French sales

By Dominique Vidalon and Helen Reid

PARIS (Reuters) -Supermarket giant Carrefour is spending more on price cuts as it tries to win back market share, the company said on Wednesday as it announced a slight dip in sales in its core market of France.

Supermarkets across Europe have been under strain as inflation drives consumers to cut back on groceries and seek bargains at discount chains. In France, Carrefour faces tough competition from market leader Leclerc, a private company.

"The objective is to gain market share, obviously without starting a price war," finance chief Matthieu Malige told analysts on a call.

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Inflation is still putting pressure on consumers' disposable income, resulting in falling sales volumes, he added, saying that he hopes volumes will turn positive again later this year.

Price inflation in Europe should stabilise at "low single-digit" levels for the rest of this year, Malige said.

Squeezed shoppers have also been trading down from big consumer brands to cheaper supermarket brands, and Carrefour said its own-brand products accounted for 37% of food sales in the first quarter, up from 35% a year ago.

Carrefour stuck to its 2024 targets for higher profits after improving sales in Brazil and hyperinflation in Argentina helped boost overall sales growth in the first quarter.

The company also increased its planned cost cutting for 2024 by 200 million euros ($214 million) to 1.2 billion euros, and Malige said the extra savings would be used to invest in price cuts.

Sales reached 22.156 billion euros, marking like-for-like growth of 13.5%, an improvement from 10.2% growth in the fourth quarter of 2023, and ahead of analysts' expectations.

In France, Carrefour's hypermarket sales were down 1.7% in the first quarter of 2024 compared with a 0.3% rise in the fourth quarter of 2023. Sales in France overall were down 0.4%.

In Brazil, the group's second-largest market, sales rose 1.3% in the quarter, helped by the continued ramp-up of the Grupo BIG stores following their conversion and good performance at the Atacadao cash-and-carry stores.

($1 = 0.9360 euros)

(Reporting by Dominique Vidalon and Helen Reid; Editing by Emelia Sithole-Matarise, Kirsten Donovan)