STOCKS NEWS EUROPE-French price war fears hit Carrefour

Shares in Carrefour (Paris: FR0000120172 - news) fall 4.25 percent, leading decliners on the CAC-40 index of French blue chips, after brokerage Kepler Cheuvreux says a price war among French supermarket retailers could turn out to be worse-than-expected and hurt Carrefour's margins this year.

"Carrefour will need to cut prices by more than we thought already this year...As a result we cut our French EBIT margin and now expect a 15 basis points year-on-year decline for 2014 versus 8 basis points before," the brokerage writes in a note.

Kepler, which also cuts its rating on Carrefour to "hold" from "buy", says it now expects Carrefour to post a 2014 group EBIT of 2.269 billion euros ($3.15 billion), five percent below the market consensus.

British supermarket retailers such as Tesco (Xetra: TCO.DE - news) , Wal-Mart owned Asda and Morrisons have also faced pressure on prices, due to competition from German discount supermarket companies such as Aldi and Lidl.

($1 = 0.7212 Euros)

Reuters messaging rm://dominique.vidalon.thomsonreuters.com@reuters.net