Belgium's Colruyt Group has announced it has reached an agreement to acquire 100% of the shares of Degrenne Distribution.
Degrenne Distribution operates in the northwest of France and in the Ile-de-France region. The family business supplies about 1,800 local stores with dry, fresh and frozen products.
In a statement, Colruyt said the investment is in line with the group's ambition to support the growth of the 'thriving convenience store market in France.'
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French Local Retail Trade
This acquisition enables Colruyt Group, which already operates in the French wholesale market through Codifrance, to strengthen its growth in the French local retail trade.
Codifrance supplies more than 300 mini-markets affiliated to the Coccinelle, CocciMarket and Panier Sympa brands with dry food, fresh produce and frozen food.
The affiliated retailers also receive assistance with marketing, communication, range development, refurbishment and design of their point of sale.
In addition, Codifrance supplies around 1,200 independent stores and wholesalers in more than 70 departments.
Stable Transition
The closing of the transaction, and hence the integration in Colruyt Group's consolidated figures, is not expected until the financial year 2023/24.
The current management will remain on board until the end of September 2023, in view of ensuring a stable transition, Colruyt said.
Increase In Operating Expenses
In December, Colruyt Group posted an operating profit (EBIT) of €123 million in the first six months of its financial year, down 41.6% year-on-year.
The decline was driven by the company absorbing part of the cost-price inflation, as well as a significant increase in operating expenses, it said.
Speaking in December, CEO Jef Colruyt commented, "As a retailer and as the market leader, we continue to fulfil our role in society, whereby the Colruyt Lowest Prices formula continues to deliver on its brand promise.
"This implies that price increases are not fully passed on to the customer, nor is the high inflation on our energy and transport costs and our employee benefit expenses. As a consequence, Colruyt Group's results are under significant pressure."
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© 2023 European Supermarket Magazine – your source for the latest retail news. Article by Robert McHugh. Click subscribe to sign up to ESM: European Supermarket Magazine.
