PARIS — Carrefour SA wrapped up a tumultuous 2011 with weak financial results and grim prospects for rapid improvement despite a change in leadership.

Carrefour SA wrapped up a tumultuous 2011 with weak financial results and grim prospects for rapid improvement despite a change in leadership.

The world’s second-largest retailer behind Walmart reported a 14.3% drop in 2011 net income to 371 million euros ($480.8 million) on a meager 0.9% rise in sales to 80.51 billion euros.

The company’s bottom line was impacted by impairment charges totaling 2.66 billion euros, mostly related to its operations in Italy.

However, operating income plunged 19.2% to 2.7 billion euros, reflecting the struggles of Carrefour’s French hypermarkets and its exposure in southern Europe, particularly Spain, Italy and Greece, where the sovereign debt crisis has been particularly severe.

The most visible casualty of the company’s performance has been chief executive officer Lars Olofsson, who announced in January that he would step down in June. He will be replaced by Georges Plassat, who joins the company this month from Vivarte, a French fashion retailer he had led since 2004.

Olofsson had staked Carrefour’s turnaround on a new format for its hypermarkets, dubbed Carrefour Planet. Plans for 2012 called for an investment of 1.5 billion euros to convert 500 hypermarkets, but results from the first 81 stores revamped in 2011 failed to meet expectations, although the outlets outperformed unconverted hypermarkets.

According to Olofsson, the Planet stores in Belgium and Spain managed to gain market share, with Belgian locations in particular achieving strong increases in customer traffic and sales increases in all categories. In France, however, the Planet remodels were dogged by operational problems, including what management referred to as an overload of simultaneous critical reorganization projects.

As a result, the program has been brought to a near halt, with only 11 stores slated for conversion this year. Capital spending for the year has been slashed to around 1.6 billion euros to 1.7 billion euros from 2.3 billion euros last year. Most of that reduction will come from Europe, where Carrefour spent 400 million euros on the Planet Carrefour remodels last year.

"In 2012 we will capitalize on our strengths while exercising strict cost and cash discipline to adjust to the environment in which we are operating," said Olofsson in a statement. "Carrefour will continue implementing its Reset Plan in France as well as local action plans in southern Europe, aiming at consistent lower prices, more targeted promotions and a considerably enhanced Carrefour-branded product offer.

"We will pragmatically adjust the rollout of Planet to the current context."

Olofsson added that Carrefour will attempt to accelerate its multi­channel strategy by expanding its e-commerce operations as well as increasing the number of drive-through pickup points.

A recent report from RetailNet Group contends that the growing popularity of the drive-through concept in France has been a significant factor in sinking Carre­four’s hopes for the Planet format. The concept, first launched in France in 2000 by rival Auchan Group, has since been adopted by nine other hypermarket operators in the country.

The RetailNet Group report states that French retailers are seeing average transactions that are 62% higher at their drive-through locations than in their traditional formats, and projects that, by 2021, 20% of fast-moving consumer goods (FMCG) sales will be generated by the format.

"The Drive concept … looks to finally have brought e-commerce profitably to grocery categories, and in doing so further cannibalizes the hypermarket for both spend and trips," the report states.

Carrefour fields two drive-through formats, Carrefour Drive and Promocash Drive, a cash-and-carry banner that also provides home delivery. As the RetailNet Group report points out, the drive-through concept offers consumers a convenient blending of online ordering without having to walk the store. For European retailers, it offers a means to penetrate growing urban markets without the costs of a home delivery service.

For Carrefour, expanding its drive-through network provides a low-capital investment avenue to growth. Like other operators, the chain is experiencing higher average transactions than in its hypermarkets, but with lower shopping frequency.

Carrefour had a total of 30 drive-through locations at the end of 2011 (including both hypermarket and supermarket locations) and plans a rapid rollout to achieve 150 to 200 by the end of 2012. Operationally, the company will offer about 10,000 SKUs at hypermarket locations and about 8,500 at Promocash locales.

Elsewhere, Carrefour is focusing its capital on such growth markets as China, Brazil and Indonesia. It will also continue to test newer formats — such as convenience stores and cash and carry — that require less intensive investment than hypermarkets.

Olofsson’s rocky three-year tenure suggests, however, that solutions to Carrefour’s problems will not be simple, nor will they be quick.