Ailing Auchan to reorganise hypermarkets

After reporting a net loss of 1.145 billion euros in 2018, French retail group Auchan has now announced a cost cutting plan for its hypermarkets, including major restructurings.

In the red

The group’s problems are mostly situated in distribution, which experienced a 3.3 % turnover decrease last year, as well as a 20.5 % drop in gross company profit. Results in France were particularly abysmal, partly as a consequence of the yellow vest demonstrations.

The board already responded to this crisis in October of last year and appointed Edgard Bonte as the new CEO. Bonte is a veteran of Kiabi, one of the chains that are part of Gérard Mulliez’s empire, just like the Auchan Holding. The new CEO still believes in the hypermarket concept, but he is also convinced it needs to reinvent itself to retain its attractiveness. His plan decreasing the space to shop in, and include new activities, such as catering. He also wants to collaborate with other Mulliez companies (Decathlon, Leroy Merlin, Norauto, Kiabi). In order to save money, there will have to be fewer investments. Bonte emphasises that there is no downsizing plan and there will still be plenty of job opportunities.

Besides Auchan Retail, the eponymous holding also contains Oney, a company specialised in payment solutions, and Ceetrus, a real estate developer that operates quite a few shopping centres.