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SAO PAULO, Jan 13 (Reuters) - Same-store food sales at GPA SA, Brazil’s largest diversified retailer, rose in the fourth quarter despite the country’s harshest recession ever, a sign that the company’s efforts to bolster cash-and-carry operations are bearing fruit.
Food sales at stores open for more than a year rose 7.7 percent, GPA said in a Friday securities filing. The main driver of growth, the company said, was its Assaí cash-and-carry division, whose same-store sales rose 17.3 percent.
Last year, same-store sales at GPA’s food division grew 6.7 percent, supported by an 18.6 percent advance at the Assaí unit.
GPA, controlled by France’s Casino Guichard Perrachon SA , is increasing focus on cash-and-carry as consumers spurn traditional supermarkets in search of lower prices. Cash-and-carry retailers sell food and other goods in bulk, to offer low prices.
This year, São Paulo-based GPA plans to open six Assaí outlets and convert at least 15 Extra hypermarket stores to the cash-and-carry format, with much of the expansion in lower-income cities of northeastern Brazil.
The company’s “operating turnaround momentum continues,” UBS Securities analysts led by Gustavo Pires Oliveira wrote in a client note.
GPA’s preferred shares rose as much as 1.8 percent to 60.39 reais, a two-month high, before trading slightly lower.
The retailer’s appliances and furniture retail business, Via Varejo SA, continued to struggle as unemployment and low consumer confidence kept shoppers away. Same-store sales at Via Varejo fell 1.7 percent last quarter and 1.9 percent in the year.
GPA said last year it would sell Via Varejo, reasoning that its food business will recover faster from Brazil’s recession than will its the appliance operations.
$1 = 3.1805 reais Reporting by Ana Mano; Editing by Jason Neely and Steve Orlofsky