PARIS: Supermarket giant Auchan said yesterday that a price war in France and the currency effect of conflict in east Ukraine had pushed net profit down 11.5 percent in the first half.
In spite of damage to sales figures arising from fighting between Ukrainian troops and pro-Russia rebels, Auchan said its overall sales had held up because of international performance.
“The Group’s performance was significantly impacted by foreign currency effects, notably in Russia and Ukraine,” said chairman Vianney Mulliez.
Auchan said it was being vigilant but was not unduly worried regarding the effect of retaliatory sanctions by Russia against European food products.
The company said that activity in its stores in Russia was not much affected and sales were doing well, although there were some difficulties over supplies, notably of Norwegian salmon.
But in Ukraine, where Auchan has 11 supermarkets, and where business had been good, the situation had turned “delicate”.
In the first six months of the year, net group profit fell to ¤272m ($359m). This was offset partly by the group’s expansion into Eastern Europe and China.
Auchan said that crisis over Ukraine and Russia, countries in which the currencies have fallen heavily, had an unfavourable exchange rate effect on the figures.
AFP
