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Carrefour, Europe's largest food retailer, has taken a bold step in its ongoing strategic overhaul by agreeing to sell its loss-making Italian operations to food and beverage manufacturer NewPrinces Group. The deal, which values Carrefour Italy at roughly 1.09 billion US dollars, is expected to close by the end of the third quarter, pending regulatory approval.
Carrefour Italy currently operates 1,188 stores across the country but struggled with a staggering operating loss of approximately 73 million US dollars in the last fiscal year. The divestment is seen as a crucial move for Carrefour, allowing it to improve profitability, streamline operations, and unlock more robust cash generation going forward.
In a market where inflation and shifting consumer behavior have presented serious challenges, Carrefour's decision aligns with a broader strategy to consolidate its core strengths and reallocate resources to more profitable territories. France, Spain, and Brazil have emerged as the company's strongest performers, a trend that Carrefour CEO Alexandre Bompard emphasized in his recent statement.
Interestingly, while the company is withdrawing from Italy, it is simultaneously witnessing a steady rebound elsewhere. Second-quarter results showed a 4.4% like-for-like increase in sales compared to the previous year, signaling a recovery in consumer purchasing power after years of inflation-fueled pressure. France, in particular, recorded a return to sales growth for the first time since 2023, with a modest but meaningful 2.1% increase.
Much of this improvement is attributed to Carrefour's continued efforts to reduce prices, making its offerings more accessible to inflation-weary shoppers. Chief Financial Officer Matthieu Malige noted a historic dip in volumes during the inflation surge of 2022 and 2023, but pointed out that the tide is turning. As consumers regain confidence, Carrefour is keen to retain their loyalty through aggressive price strategies and competitive positioning.
Despite the good news on sales, the company's overall profitability remains under pressure. Operating margins for the first half of 2025 fell slightly to 1.6% from 1.8% a year earlier, reflecting ongoing cost pressures and the complexity of restructuring in a turbulent retail landscape.
Nevertheless, Carrefour's strategic exit from Italy may ultimately strengthen its core business. By shedding unprofitable assets and focusing on stronger markets, the retailer is repositioning itself for more sustainable growth. With consumer habits evolving and inflation slowly cooling, Carrefour appears determined to emerge leaner, stronger, and more competitive across its key territories.
