Lars Olofsson, the chief executive, promised decisive action to put the company back in health [Reuters]

Carrefour, Europe's biggest retailer, has announced a shock 249 million euros ($360m) half-year loss and warned  it could get worse before it gets better.

Carrefour warned 2011 profits would slump 15 per cent as it cuts prices in a bid to reverse falling market share and tackle an increasingly tough economic environment.

In 2010 the retail giant made a 97 million euros profit in the first six months.

The company, which runs more than 9,500 stores in 32 countries, said operating profits in its core French market dropped by 40 per cent and Europe overall was down 33 per cent.

Lars Olofsson, chief executive of Carrefour, said: "We are biting the bullet in 2011 and rebuilding momentum in 2012 to deliver long-term sustainable profitable growth."

Olofsson, who took over in 2009, said the results were "unsatisfactory" and promised "radical and decisive" action to put the French company "back on a sound footing to rebuild momentum".

Carrefour conceded it has also made mistakes, such as raising prices in its main French market above rivals such as E Leclerc and Intermarche.

"We tried to do too much too quickly," said Olofsson.
 
Faced with gloomy prospects in Europe, Carrefour reiterated it was keen to accelerate its expansion in fast-growing emerging markets, notably China and Latin America.

Source: Agencies