After a forced reduction of its number of French stores, Dutch chain Hema now sees potential to double its presence in France again by 2026. Franchising is not an option for that new target, while cost control is mandatory.
Tight budget
When she started as CEO two years ago, CEO Saskia Egas Reparaz said that Hema needed to focus on its key markets. Its unbridled foreign expansion had led the Dutch chain to financial jeopardy, meaning it had to close all its British and Spanish stores, and one in ten of its French stores as well.
This cutback meant that its French branch was profitable again, and the reduced base was stable enough to start expanding again. As France (with its 68 Hema Stores, almost half of which are located in or around Paris) is now even branded a “key market”, ambitions in the Hexagon are being raised again, country manager Stéphane Frenkel told Républik Retail. If all goes well, Hema even sees potential to double its number of stores again in a later stage. However, unlike earlier stores that were managed by franchisees, the chain will open all the new stores by itself.
“We will not rely on franchising for now”, Frenkel said. Corners in Casino supermarkets are also being closed, despite being a major success. Hema had opened 350 corners in Franprix and Casino stores, but “this has cannibalised our own stores”.
Focus op visibility
Another reason for the focus on its own physical is the fact that they are the chain’s major marketing channel, as Hema does not invest in its French media campaigns. The new stores will therefore open in major shopping streets, at 400 sqm locations with a lot of traffic. Only if the new stores prove to be a success, diversification through franchising or corners can be brought up again.
Online remains only a marginal part of all activities, Frenkel admits: customers visit mostly for inspiration, the average shopping basket barely hits fifteen euros. The Dutch retailer, which offers delivery from French stores and click & collect, is “not a champion regarding speed of delivery” and suffers from high delivery costs – French goods still have to come from a warehouse in the Netherlands. Having the cost of online deliveries down to about the cost of serving a customer in a store is Frenkel’s target now, he admits.
(This article was amended to reflect that an incorrect citation by Républik Retail was corrected by Hema on 12 July)
