Reporting second quarter sales of €5.8 billion, Casino said that sales were up just 0.7 per cent compared to the previous year, although like-for-like sales (assuming no change in the number of stores or in exchange rates) were a slightly more impressive 3.6 per cent higher.
The performance in France was disappointing, however. Domestic sales were ahead just 1.4 per cent in the three months, hit by a 0.5 per cent negative calendar impact and continued low levels of consumer spending, below the 2 per cent forecast by analysts Goldman Sachs.
The Géant hypermarket chain continued to struggle, as have most hypermarket businesses over the last year, from a high-price image, and while this was partially offset by good sales from the convenience store unit (which consists of Petit Casino, Eco-Service, Spar, Vival and Monoprix), growth at the discount store arm (Leader Price/Franprix), was not as good as analysts had predicted, coming in at 5.1 per cent on a like-for-like basis, rather than 7.5 per cent.
Outside France, the situation was slightly better, with solid performances from the Smart & Final unit in the US, with like-for-like gains of 16.3 per cent, and in Latin America, where sales were up 30.3 per cent on a like-for-like basis.
Impacted by weak demand at home and the relative weakness of various foreign currencies against the euro, Casino's first half performance (sales up 0.8 per cent overall, 4.6 per cent on a like-for-like basis, to €11.1 billion) was probably as good as could be expected given the tough conditions.
Most worrying, perhaps, is the worse-than-expected performance from the discount business, given that these no-frills stores have been the lifesaver for many French retailers over the last year as their larger stores have struggled to compete in an increasingly price-conscious market.
While there is no real cause for panic just yet, the slower growth rate at Leader Price and Franprix suggests that competition among discounters is intensifying. Carrefour has been very aggressive at rolling out its Ed fascia, while Intermarché's Netto arm and foreign groups Lidl and Aldi have also increased the number of stores to capitalise on lower consumer spending levels.
Recent signs that the French economy is beginning to grow again will undoubtedly be welcomed, while moves to loosen some of the legislative restrictions on the retail trade in a bid to stimulate spending could also help, but with exchange rate problems plaguing many of its most important overseas businesses as well, Casino's future growth could be determined by factors which are largely out of its hands to control.