Growth in Brazil, Carrefour's largest market after France, which Chief Executive Georges Plassat has earmarked for expansion, stayed robust in the quarter too.

But trading conditions remained weak in China where the government is cracking down on conspicuous consumption, notably on alcohol.

Overall, Europe's largest retailer said it was on track to meet expectations for a higher operating profit this year.

Chief Financial Officer Pierre-Jean Sivignon said that analysts' consensus forecast for a 6.3 percent rise in operating profit to 2.38 billion euros this year was "reasonable".

Carrefour's resilient performance contrasts with the difficulties at British rival Tesco which is reeling from an accounting scandal and a downturn in trading that has shaken investor confidence.

"The turnaround plan has stopped the bleeding and improved business in France. While the patient is out of the emergency ward, it is now in the sick ward and we do not see it return to rude health yet," Bernstein analyst Bruno Monteyne said in a note. Bernstein has a "market perform" rating on Carrefour.

Carrefour makes 73 percent of its sales in Europe and has suffered from a reliance on the hypermarket format it pioneered, now that customers favour more local and online shopping.

In response, Chief Executive Georges Plassat has lowered costs, revamped stores, cut prices, simplified product offerings and given more autonomy to store managers, starting in France, where the group makes 46 percent of its sales.

RESILIENT FRANCE

Carrefour's third-quarter sales were 21.077 billion euros (16.91 billion pounds), in line with the average forecast of 21 billion in a Reuters poll of analysts. That was up 2.8 percent after stripping out fuel and currencies, a slowdown from 4.9 percent growth in the second quarter.

Shares were up 1 percent by 0840 GMT (09:40 a.m. BST) at 22.31 euros after gaining 2 percent earlier, outperforming the European retail sector which gained 0.3 percent.

In austerity-hit Southern Europe sales suffered from low consumer sentiment, poor summer weather and a fall in fruit and vegetable prices, which Sivignon, echoing similar comments from smaller Casino on Tuesday, partly blamed on excess supply tied to the Russian trade ban.

In France, sales rose 0.2 percent like-for-like overall. Revenue at French hypermarkets fell 0.2 percent after rising 0.4 percent in the second quarter, also snapping a growth streak of five consecutive quarters. This was, however, better than the 1 percent fall analysts had feared.

Carrefour said French hypermarkets' dry grocery products sales continued to grow, while non-food sales were "resilient".

Sales at Carrefour's convenience stores grew 5.1 percent like-for-like in the quarter. Carrefour agreed earlier this year to buy the Dia discount stores in France in a move to increase its focus on lower prices and on smaller convenience stores.

Many retailers across Europe have been struggling as shoppers' disposable income is squeezed by subdued wage growth and austerity measures, and most have responded with price cuts.

Smaller French peer Casino on Tuesday said sales growth slowed sharply in the third quarter.

Like-for-like sales growth in Brazil, Carrefour's second-largest market after France, was 7.7 percent, an acceleration from 7.2 percent in the second quarter.

(Reporting by Dominique Vidalon; Editing by Andrew Callus and Vincent Baby)

By Dominique Vidalon