Carrefour is the largest retailer in Europe and the second largest in the world. Like Walmart (NYSE: WMT), it has struggled to make sales in it core market. Carrefour just dropped its financial forecasts for the fourth time in four months.
Carrefour is primarily a grocery operation, but it appeals to a wide variety of shoppers, particularly at the low end of the market.
Carrefour, which operates in 32 countries and has more than 9,600 stores, has had trouble for one of two reasons. The first is that its normal customers have gone up-market, which is unusual in a recession. The other is that even people among the middle class have withdrawn from the retail market as much as possible because the economy has slowed.
The sales results of Walmart and Carrefour are as good a proxy as any for consumer confidence and consumer spending because their footprints are so very large. The sales of each are a signal that shoppers, even those who need only the basics, are anxious because either their incomes have not increased in real terms for years or they fear for their jobs.
Douglas A. McIntyre
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