French supermarket group Casino dives into the red

Supermarket group Casino needs to reposition itself after a difficult year. Turnover fell, especially on the French home market due to a lack of tourists. All branches of the group went downhill.

Corona as an excuse

It was not a good year for the Casino group. The French distributor saw a decline in turnover in all its branches. Only in Latin America did the group manage to increase its turnover by 2.7%. On the French home market, sales even fell by 5.4% on a comparable basis. Group revenue totalled 14.1 billion euros.

The group largely blamed the decline on the corona pandemic, stating that there were far fewer commuters and tourists in the important regions of Paris and the south-east of France. Indeed, Casino is betting heavily on smaller convenience supermarkets in the inner cities, specifically with proximity chains Monoprix and Franprix. In 2020, however, Franprix was still benefiting from the corona crisis, with sales up 7%, compared to a 7.3% drop today. Monoprix’s sales also fell by 3.7% in 2021.

Larger stores did not fare any better. The Casino supermarkets generated 6.8% less comparable sales, while sales at hypermarkets fell further by 8.9%. Only the online store Cdiscount performed stable.

E-commerce above average

Profits also fell: while Casino had initially forecast growth for 2021, the supermarket group now had to concede a 1.7% drop in gross profit. EBITDA ended at 1.28 billion euros compared to 1.3 billion euros a year earlier, according to Linéaires. Problems with stocks, deliveries and price increases are said to be at the root of this.

Casino realises that it needs to reposition itself. The group plans to divest another 1.3 billion euros in assets to reduce its debts, but at the same time, top executive Jean-Charles Naouri wants to shift attention to formats that are dynamic. Premium, proximity and e-commerce now account for 76% of sales, with 15% growth in e-commerce and even 48% more sales from home delivery. The group thus far outstrips the market, according to Linéaires, and this is mainly due to the partnerships with Ocado and Amazon in the Paris region.

Cashier becomes customer advisor

In its physical stores, Casino wants to focus more on service and customer relations, LSA reported earlier. After years of restructuring and the divestment of hypermarkets, the distributor is now reforming the position of the cashier. The number of traditional cashiers is to be drastically reduced thanks to automated checkouts, shopping-scanning applications and even unmanned shops. The role of the ‘customer advisor’ is emerging instead.

Over a cup of coffee (soon to be available in all Casino stores), customer advisors will also be able to recommend new services, such as subscription-based Casino Max and home delivery via partners or personal shoppers. Mini cameras and artificial intelligence should also detect stock shortages in the stores faster.