January 16, 2018 / 9:38 PM / 3 months ago

UPDATE 2-Carrefour Brasil sales rise, limited by low food prices

(Adds details on store openings)

SAO PAULO, Jan 16 (Reuters) - Fourth-quarter gross sales at Brazilian food retailer Carrefour Brasil rose 5.3 percent from last year to 13.63 billion reais ($4.23 billion), as the sector continues to benefit from a consumer-led turnaround.

In a securities filing on Tuesday, the company said gross sales for full-year 2017 jumped 7.2 percent, to 49.65 billion reais, while same-store sales, a measure of revenue from stores open at least 12 months, rose 1.4 percent.

Revenue at Carrefour Brasil and arch rival GPA has been rising in recent quarters, as consumers in Latin America’s biggest economy show optimism at the tail end of a long economic downturn, even as brick-and-mortar investment in Brazil has lagged.

But as with GPA, fourth-quarter sales growth came in below that of the previous quarter, when the company reported an increase in gross sales of 5.5 percent in annual terms.

Food deflation, which has dragged through 2018 in the wake of a strong agricultural harvest, hurt revenue as did what the company called a challenging base of comparison.

The IPCA consumer price index for household food products fell 5.1 percent in the quarter from the same period a year ago, more dramatic than the 4.5 percent fall registered in the third quarter.

At the group’s cash-and-carry stores, a format which offers final consumers a wholesale experience, same-store sales grew 2.2 percent, while sales contracted 0.1 percent at the group’s more traditional formats.

Carrefour Brasil, like many retailers in Brazil, is undergoing an expansion drive.

In the fourth quarter, the company said, it opened 22 new convenience stores, which upper- and middle-income Brazilians are increasingly valuing as the country emerges from recession. The retailer also opened three new cash-and-carry stores, all in different regions.

$1 = 3.22 reais Reporting by Gram Slattery; Editing by Susan Thomas and Lisa Shumaker

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