France's Casino blames fierce competition for slower hypermarket recovery

By Helen Reid

PARIS (Reuters) -Debt-laden supermarket group Casino warned on Wednesday of likely 2023 losses for its core French business due to a slower-than-expected turnaround at its hypermarkets division.

More intense discounting than usual across the sector is making it harder for Casino's large-scale hypermarket stores to bring back shoppers who had switched to rivals, Casino's chief financial officer David Lubek told Reuters.

"The competitive environment in this end-year period is tougher than what we expected a few months ago," Lubek said. Supermarkets are funding more vouchers and special offers for clients than last year, he added.

Casino is building back its business after an October deal to avert bankruptcy through a debt restructuring led by Czech billionaire Daniel Kretinsky.

Casino said sales volumes at its hypermarket stores were down 12% year-on-year over the past week, with the number of shoppers down 3%. At its supermarkets unit, Casino said the recovery was ongoing, with footfall up 10% and sales volumes up 7%.

The retailer estimated that its 2023 earnings before interest, tax, depreciation and amortisation (EBITDA) after leases would range between a loss of 78 million euros ($85.1 million) and a loss of 140 million euros.

Casino's shares fell 1.3% in early trading. The retailer had already last month cut its 2023 profit outlook and reported a drop in third quarter sales.

Kingfisher, which owns French DIY chains Castorama and Brico Depot, on Wednesday also cut its full-year profit outlook for the second time in three months, saying its performance in France was weaker-than-expected.

($1 = 0.9168 euros)

(Reporting by Sudip Kar-Gupta and Helen Reid, Editing by Louise Heavens and Elaine Hardcastle)