UPDATE 1-Casino Q1 French sales down, hypermarkets worsen

Thu Apr 18, 2013 12:16pm EDT

* Q1 sales 11.7 bln euros, up 2.5 pct like-for-like

* Q1 French sales down 3.4 percent vs -2.2 pct in Q4 2012

* French hypermarkets like-for-like sales down 11.5 pct (Adds detail, background)

PARIS, April 18 (Reuters) - Casino posted a quarterly revenue drop for its core French market, including a worse-than-expected 11.5 percent fall in hypermarkets, as the French retailer failed to benefit from recent price cuts.

Consumer groups across Europe are struggling as shoppers' disposable income are squeezed by rising prices, subdued wage growth and austerity measures.

Overall group sales for Casino, which controls Brazil's top retailer Grupo Pao de Acucar, rose 33.7 percent on a reported basis, to 11.7 billion euros ($15.31 billion), as the company offset French weakness thanks to robust growth in emerging markets in Latin America and Asia.

Stripping out acquisitions, currency effects and excluding petrol, this was a like-for-like rise of 2.5 percent and a slowdown from 3.2 percent growth in the fourth quarter 2012.

Casino has been expanding in fast-growing emerging markets Thailand, Brazil, Vietnam and Colombia, which now make up 63 percent of sales, while European consumer spending has been hit by the euro zone debt crisis.

Europe's largest retailer Carrefour said earlier in the day it saw little sign of economic improvement in the austerity-stricken continent after falling demand in Spain and Italy and weakening trade in its core French market held back first-quarter sales.

In France alone like-for-like sales fell 3.4 percent, accelerating a 2.2 percent decline in the fourth quarter 2012.

Closely watched like-for-like hypermarket sales fell 11.5 percent, after falling 9.9 percent in the previous quarter. Analysts had eyed a sales decline of around 10 percent.

In the last quarter of 2012 Casino funded permanent price cuts on basic products by reducing promotions, a move that cost it some customers, and it had announced plans to extend these price cuts to national brands at its Geant hypermarkets.

Analysts say it usually takes several months before price cuts lead to stronger sales volume and had expected French hypermarket sales to fall by around 10 percent in the first quarter.

In emerging markets, Latin America posted like-for-like sales growth of 8.7 percent while Asia grew 8.5 percent in the quarter.

Casino shares have gained 11 percent this year, outperforming a 7 percent rise in Carrefour and a 3.5 percent gain in the European retail sector.

($1 = 0.7644 euros) (Reporting by Dominique Vidalon; Editing by Lionel Laurent)

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