Carrefour Profit Lifted by Strong French Market Despite Falling European Sales

Carrefour, France's largest retailer, said robust growth in its domestic business helped it post a decent rise in profit in the opening six months of the year.

Recurring operating income rose 4.9% to €766m ($1bn, £659.5m) in the half year to 30 June, reported Carrefour, as the European supermarket chain sees stronger results off the back of its restructuring plan that targets pricing and store management.

In its France unit alone, Carrefour posted earnings before tax of €482m - a 74.2% leap across the year.

Carrefour's Chief Financial Officer Pierre-Jean Sivignon said that the French business "continues to show encouraging signs".

Following the positive half year report, Carrefour shares jumped in early trading, reaching gains of as much as 5% on the day in Paris.

Operations in Europe and Asia

Carrefour, which has been battling tough market conditions in Europe, reported a 4.6% decline in net sales across the continent.

The world's second-largest retailer has been struggling for years in Europe due primarily to its reliance on hypermarkets.

European consumers increasingly prefer to buy goods either locally or online, weighing on hypermarkets' sales.

The company's recurring operating profit in Europe plunged 76.4% on the year, to €36m, driving in large part by the tough economic situation in Italy.

However, sales in Asia rose by 2.7% at the end of the first half to €3.39bn, though sales in China and Taiwan only picked at the second quarter.

"Recurring operating income was impacted by wage inflation and continued expansion in China," said the company.

In June, reports rolled out that the French retailer is planning to sell its businesses in China and Taiwan as it looks to cut down on competition risk abroad and focus on the key home market.

Carrefour currently operates 220 hypermarkets in China, making it the fourth-largest in the country with a 6.9% market share in 2012. Also, the retailer earns about 77% of its Asian revenues from China.

In Taiwan, Carrefour is the market leader with a 48.1% market share.

In an attempt to expand its business in Asia, Carrefour plans to open about 10 new stores in India.