French department store group Auchan has been through a difficult first half of 2014: turnover dropped 0.6 % in a like-for-like situation regarding the number of stores and its net profit even dropped 14.4 %.
Chinese numbers impact results
Auchan's group turnover in the first six months reached 26.027 billion euro, 16.1 % more than in the same period last year. Growth was mainly achieved through a shareholder agreement between Auchan and Ruentex concerning the exploitation of the Sun Art Retail Group. This move has meant that the Chinese subsidiary's results have had to be fully incorporated into the parent company's books since New Year.
If the China effect, the exchange rate fluctuations and the gas sales are excluded, then the turnover increase was 4.9 % and if store growth is excluded on top of that, the turnover would have been - 0.6 %.
Western Europe struggles
Geographically speaking, Auchan had to deal with a 1.9 % drop in France, and a 5.5 % drop in Western Europe in the first six months. Eastern and Central European sales grew 9.3 %, while Asian turnover grew 3.2 %, even without the inclusion of the Sun Art Retail numbers.
Looking at the different types of department stores, the hypermarkets' impact is quite clear. They have managed to boost their turnover 16.1 % (to 21.1 billion euro). Together, they represent 81.1 % of the group's total turnover. Auchan has 839 hypermarkets of its own, while it also has 167 franchisees. Supermarkets, the company bank and the real estate branch complete the turnover numbers.
If all costs are deducted, Auchan had a 272 million euro net profit in this first semester, a 11.5 % drop compared to the 317 million euro it gathered last year.