(Updates with CEO’s comments in third paragraph.)
Aug. 30 (Bloomberg) -- Distribuidora Internacional de Alimentacion SA, the world’s third-largest discount retailer, said negotiations to reach a major franchise agreement in Brazil are “progressing.”
The Madrid-based company, spun off July 5 from Carrefour SA, aims to close a deal in Brazil before the end of the year, Chief Executive Officer Ricardo Curras said on a webcast conference call today.
“We are targeting an accelerating growth pace in store openings in emerging markets, especially in Brazil, during the second half as other mature markets such as France are suffering really tough times,” Curras said.
Brazilian retail sales are being bolstered by consumer lending that’s growing at a 20 percent annual pace and rising employment. The unemployment rate in Latin America’s biggest economy fell to 6 percent last month, the lowest since December, according to the national statistics office. Consumer confidence rose 5.4 percent to a record high in July. The broadest measure of retail sales rose 9.5 percent in the year through June, while supermarket sales climbed 4.8 percent in July from a year ago.
Boulogne-Billancourt, France-based Carrefour, which is trying to improve its domestic business, decided to spin off Dia after approaches by potential buyers of the unit came to nothing, Chairman and CEO Lars Olofsson said in May. Olofsson has said the priority is Carrefour’s domestic market, the retailer’s largest, after a decade in which sales barely grew.
Carrefour approved a proposal last month to merge its Brazilian assets with Cia. Brasileira de Distribuicao Grupo Pao de Acucar, the nation’s largest retailer. The merger plans fell through after Casino Guichard-Perrachon SA, the French retailer that shares control of Pao de Acucar with Brazil’s Diniz family, rejected the offer.
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