Consumers are finding their way to French retail group Auchan‘s hypermarkets again, but this is due to price investments weighing on margins. The group remains discreet about its operations in Ukraine and Russia.
High investments
For the first time in nine years, Auchan was able to grow again in its French home market. In particular, hypermarkets – a store format that has been under pressure for years – performed strongly, significantly outperforming those of rival Carrefour with a comparable growth of 2.4%. The number of tickets rose 4.7% in France and the retailer said it managed to win back 250,000 customers.
Group-level retail operations recorded sales of 32.8 billion euros, a comparable growth of 2.9%. That growth did not come naturally: the retailer increased investments by 30% last year. Auchan also made strenuous efforts to improve price competitiveness. That resulted in an 8.2% fall in ebitda margin.
Controversy
Also in 2023, Auchan intends to stick to its “voluntarist” policy. The retailer is acquiring 235 Spanish Dia supermarkets, is pushing ahead with cooperation with web supermarket Ocado in Spain and Poland, and investing in energy transition.
The group also continues to operate in Russia, a controversial decision it says was taken “in the interest of the civilian population” while respecting international sanctions and embargoes. Russia has admittedly seen a sharp decline in store visits. Remarkably, however, Auchan always managed to secure supplies in Ukraine.
