UPDATE 4-Carrefour stirs doubts over hypermarket revival

* Q4 sales 24.2 bln euros vs Rtrs poll 24.32 bln

* Eyes 2011 profit decline at worst end of 15-20 pct range

* Reviewing Planet rollout, capex in 2012 country by country

* Q4 underlying French hypermarket sales worst since Q3 2009

* Shares down 3 pct vs European retail sector down 0.4 pct

By Dominique Vidalon

PARIS, Jan 19 (Reuters) - Carrefour, Europe's biggest retailer, is reviewing its flagship hypermarkets revamp and warned 2011 profit would be at the bottom end of already pessimistic forecasts as cash-strapped shoppers cut back on spending.

The potential delay to the rollout of Carrefour Planet piles further pressure on its architect Chief Executive Lars Olofsson.

The Swede, who marked three years in the job earlier this month, is seen as being on borrowed time after six profit warnings in a little more than a year and a string of high-level management departures and strategy U-turns..

"Carrefour's Q4 trading update highlighted the significant challenges facing the business, with management giving little impression that they have a comprehensive or credible solution to address Carrefour's issues," said analysts at brokerage Bernstein.

The world's No.2 retailer behind U.S. group Wal-Mart is relying on the revamp of some its Carrefour hypermarkets as more upmarket Carrefour Planet stores to turn around years of underperformance in Europe.

On Thursday it vowed to focus on a more immediate plan to cut prices and target promotions better to lure shoppers who slashed purchases of discretionary non-food items in France, Southern Europe and China in the fourth quarter.

Carrefour cautioned 2011 operating profit would be at the bottom of a forecast decline of 15-20 percent, making it the latest in a procession of top European retailers, including Britain's Tesco and Germany's Metro, to warn business is getting tougher.

Shoppers' disposable incomes are being squeezed by rising prices, muted wages growth and austerity measures, and they worry the euro zone debt crisis could drag the world back into recession.

CEO Olofsson, and his plan to refocus some of Carrefour's hypermarkets on profitable categories like food, baby goods and health and beauty products, officially retain the support of the group's top shareholder, an alliance between French tycoon Bernard Arnault and U.S. private equity firm Colony Capital.

However, a source close to the matter told Reuters in November the search was on for a replacement and retail veteran Georges Plassat had turned down the job. Carrefour denied it was looking to replace Olofsson.

Some analysts have called for Carrefour to scrap the hypermarkets revamp, saying its cost and the stores' upmarket image are not appropriate in a worsening economic backdrop.

LOOKING FOR A SOLUTION

Credit Suisse analysts said the decision to review the rollout and capital spending on Carrefour Planet country by country suggested the performance of the 81 stores converted so far was not as good as hoped.

Sivignon told analysts they would have to wait until annual results on March 8 for a detailed update on Planet. He said the stores' outperformance against non-converted hypermarkets was less pronounced in France than in Belgium and Spain.

"The positive from that is that capex may fall, but the negative is that Carrefour Planet has been seen by management as the solution to its problems in France. If Planet is not the solution, then what is? " said Espirito Santo analysts.

At 1223 GMT, Carrefour shares were down 1.9 percent at 17.12 euros, lagging a 0.2 percent decline on the STOXX Europe 600 retail index. The shares have underperformed that index by almost a third over the past year.

"PROBLEMS EVERYWHERE"

Cash-strapped shoppers are mostly cutting back on discretionary purchases like furniture and electricals, rather than staples like food. On Thursday, electronics group Kesa posted a drop in underlying sales, while Dutch grocer Ahold published a modest rise.

Carrefour is more exposed to non-food goods than most grocers through its hypermarkets, which in France saw a 4.7 percent drop in underlying fourth-quarter sales -- the biggest decline for over two years.

It is also struggling with fierce competition in France from unlisted rivals such as E Leclerc and Auchan.

The fall in sales at Spanish and Italian hypermarkets was even bigger, down 7.7 percent and 7.5 percent respectively.

"Problems everywhere," said JP Morgan Cazenove analysts, adding the gloomy guidance on 2011 profits would probably trigger a 2-3 percent cut in estimates for 2012.

Sivignon did not comment on 2012 forecasts, other than saying he expected the economic climate to remain challenging and uncertain.

Fourth-quarter group sales fell 0.8 percent to 24.15 billion euros ($31 billion), below the 24.32 billion average forecast in a Thomson Reuters poll of eight analysts.

Carrefour, with more than 9,500 stores in 32 countries, said emerging markets remained a source of growth, with sales at Brazilian stores open over a year rising 4.6 percent

But China was again disappointing, with like-for-like sales falling 6.1 percent due to mild weather that hit purchases of non-food items and tough legislation restricting markdowns.