France shopping less at hypermarkets, says Auchan
French people are becoming less likely to shop at huge hypermarkets, retail group Auchan has said, as it announces some 677 “voluntary redundancies” and a new plan to revive its stores.
The brand confirmed this week that it would be getting rid of 17% of its head office positions in France - around 677 jobs - and was planning a scheme to save €1.1 billion by 2022, which it plans to use to finance its proposed “transformation” project (135 new posts are to be created as part of this).
The news comes after the group posted a 3% drop in turnover and an overall loss for its hypermarket business in France for the first time ever in 2018.
More than 80% of Auchan’s global, €50 billion operation comes from its hypermarket sites, and 35% of its total operation is in France. It holds 10% of the market share in France (the rest is held primarily by Leclerc, Intermarché and Système U).
In a press release, the group said: “The new demands of consumers require the business to move towards a simpler operation that is more open, and more responsive to changes and the constant flux of innovation.”
New CEO Edgard Bonte said: “Supermarkets developed on a powerful model, which is today inadequate.”
A move to local and online
The company is aiming to win back customers - who are becoming more and more demanding when it comes to the quality of products, it said - by becoming better known as “a good, healthy, and local” operator, it confirmed.
It is aiming for 17% of its products to be locally-produced by 2022, up from the current figure of 13%. In the same time frame, it is aiming for 33% of its products to be exclusive to Auchan, versus 25% now.
Local manufacturers and producers will be invited to sell their products directly in stores, including by setting up limited-time offers and temporary events and promotions to encourage customers to come in-store.
But the brand is also aiming to “breathe life back into” its hypermarket business by developing its online sales, even of local products.
The company is planning to create 135 new roles as part of this new business push, and said: “We need data scientists, computer experts, and workers who can create new and exclusive products.”
The changes come soon after the appointment of new CEO Mr Bonte, and the closure of 21 stores in France last year. Ten re-opened, but nine could not find new buyers, and were shut permanently, requiring the group to announce a “safeguarding plan” for 400 jobs.
In 2019, the group also shut down its operation in Italy, where it had been making a loss.
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