War and inflation cost Auchan dearly

French retailer Auchan is seeing its sales rise everywhere, except on its home market and in Ukraine. The retail group is investing millions in the fight against inflation, hoping to attract more customers to its stores.

More customers in stores

In the first half of this year, Auchan Retail saw its revenue rise by 6.2 % to 15.4 billion euros. Comparable shop sales increased by 0.6 %, while fuel sales rose by 51 %. Sales increased in almost all countries, but the French home market remains difficult: comparable sales dropped by 2 %.

With a new management team in place since the beginning of this year, Auchan is working on different fronts simultaneously to turn around the company. The efforts on purchasing power stand out: the retailer has invested 121 million euros in limiting price increases. As a result, EBITDA fell by 74 % – a result that the retailer says it “accepts”. In the second half of the year, Auchan will continue to invest in keeping prices down. The company sees the first signs of improvement: the number of customers is increasing again and the NPS (net promoter score) is also improving.

Major impact of the war

In Portugal and in Spain (where the group recently acquired 235 Dia supermarkets), the group is doing well. The same goes for the Central and Eastern European countries – Hungary, Poland and Romania, even though the government in Budapest has introduced price caps for essential products and increased the retail tax for large distribution groups.

The impact of the war in Ukraine is sizable, as well: the retailer is keeping 39 of its 42 shops in Ukraine open to meet the needs of the local population, but sales have fallen by 50 % in the first months of the conflict. As one of the only Western companies, the retail group also remains active in Russia, “with maximum autonomy and in strict compliance with the European embargo”.