“A difficult year in a difficult context. » Ludovic Delcloy, the financial director of Auchan Retail, repeated this on numerous occasions when presenting on Thursday February 22 the annual results of the distributor, present in eleven countries including Russia and Ukraine. Including the drop in activity in these two countries at war (–4.2%), Auchan Retail’s income from ordinary activities – the equivalent of its turnover – is stable at constant exchange rates ( +0.1%), reaching 32.2 billion euros in 2023.
But it is especially in France, where Auchan generates half of its revenues, that the results are “disappointing”, admitted the CFO. This, in a situation marked by hyperinflation which has shaken up consumer behavior, rising energy bills and interest rates.
Turnover fell by 2.7% to 16.2 billion euros, notably due to the drop in fuel sales (-21.5%). But excluding gasoline, the increase is only 1.3% despite the increase in sales prices, compared to 4.4% for other countries excluding Ukraine and Russia.
Price repositioning
To bring customers back and try to compete with players like E.Leclerc, Auchan has undertaken a price repositioning operation (in-store price reduction, communication campaign, etc.) from December 2023. Cost of the operation: around fifteen million euros in December and 60 million euros over the year 2024.
The brand has been looking for the right recipe for around ten years to turn around its business in France. This rather gloomy picture for 2023 is far from discouraging the distributor’s managers. “This complicated exercise lays the foundation for rebounding”declared Jean-Baptiste Emin, deputy general manager of ELO, the entity which brings together Auchan and its land activities and which posted a net loss of 379 million euros compared to a profit of 33 million a year earlier.
To get back on track, the distributor is counting on its strategic plan, Vision 2032, put in place a year ago (fight against food waste, valorization of sectors, etc.) in which the emphasis was placed on its own brands. The objective is to achieve 50% of turnover by 2032 compared to 30% today.
The distributor also intends to improve its purchasing conditions to become more competitive and return to the price war thanks to the alliance “very long term” that he is building with Intermarché. The objective is to create “the leading French purchasing center with more than 30% market share”, depending on management. And through which 77% of Auchan France’s direct purchases will go. Still under construction, it is expected to last 10 years and begin to bear fruit in 2025. “This alliance is like a couple. It’s not just joining a purchasing center to lower prices for a year”specified Jean Denis Deweine, director of development and partnerships at Auchan Retail.
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