Carrefour SA (CRRFY) shares fell sharply in Paris Thursday after the world's second-largest retailer cuts its 2018 profit outlook, slashed its dividend and posted a full-year net loss as Action Alerts Plus holding Amazon Inc. (AMZN - Get Report) drive into food sales continues to upend the global grocery store market.

Carrefour said late Wednesday that recurring 2017 profits fell 14.7% to just over €2 billion, but noted that restructuring and foreign exchange charges resulted in a net loss of €531 million. The Paris-based group also cut its annual dividend by 34% and said similar pressures would hit 2018 earnings.

"The Group is fully focused on the Carrefour 2022 plan, with ambitious action plans currently being implemented in all of the group's geographies," said CEO Alexandre Bompard. "With this plan, whose ambition is to make Carrefour the leader of the food transition and build an omnichannel universe of reference, Carrefour is back on the offensive and is investing to resume growth."

Carrefour shares fell more than 8.2% in the opening hours of trading in Paris, wiping out all of its year-to-date gains and sending the stock to the lowest level in two-and-a-half months.

The group's struggles mimic similar challenges faced by its chief global rival, Walmart Inc. (WMT - Get Report) , whose shares fell the most in decades last week after online sales growth in its key U.S. market slowed notably on both a quarterly and an annual basis in the three months ending in December. 

Amazon's purchase of Whole Food Markets last year has not only added a significant new competitor for online food retailers, it's also ignited a price war in an already-deflationary market beset by logistical challenges and fickle customer loyalty.

In response to those issues, and speculation that Amazon could seek entry into its domestic French market, Carrefour outlined details of a €6.8 billion turnaround plan that significantly increases its e-commerce investment spend and opened its China venture to a potential tie-up with Tencent Holdings Ltd.

Carrefour has a €5 billion per-year target for online food sales by 2022, an ambition that isn't likely to be met with its existing infrastructure, nor by investments in the French market alone, which comprises around half of the group's €88.24 billion in full-year sales and 44% of its operating profits.

Against that reality, Carrefour said Tuesday that will adopt a "customer-centric organization" that is more open to outside partners, including Tencent Holdings (TCEHY) , a social media giant in China and the biggest company by market cap in Asia.

"The potential acquisition of a stake in Carrefour China by Tencent, the global technology leader, and Yonghui, a retailer specialized in fresh food and small formats in China, and the signature of a strategic partnership with Tencent pave the way for great opportunities for Carrefour in the country, notably in food e-commerce," Carrefour said.

Yonghui Superstores said it and Tencent had signed a letter of intent to invest in Carrefour China Holdings NV, while Carrefour said it would remain that unit's biggest shareholder. Further terms were not disclosed.

At home, Carrefour said it would spend a further €2 billion on a cost-cutting plan over the next two years that will include 2,400 voluntary redundancies at its headquarters in Boulonge-Billancourt on the outskirts of Paris - and a tennis-ball serve away from the French Open venue of Roland Garros.