France's Auchan Retail has reinforced its pledge to become a 'multi-format phygital retailer', with further focus on convenience outlets and simplifying its portfolio of banners.
Announcing its first half results, in which the retailer saw a 0.5% decrease in revenue of €25.7 billion, and a 14.0% decline in EBTIDA, Auchan said that it 'continued to make progress' on its transformation plan, Vision 2025.
In the period, the group opened 250 new stores, some 94% of which were either convenience or 'ultra-convenience' stores, including six new MyAuchan proximity outlets in Portugal, and the further rollout of its Auchan Minute concept in China.
It has sought to converge its banners across the different markets in which its operates under a single banner, with more than 50% of its estate now converted, a process that it leading to an increase in customer numbers and revenue, according to the group.
French Focus
In its home market of France, Auchan said that it has completed the conversion of the Simply Market stores to Auchan Supermarché, leading to an increase in market share, while it also invested in its Auchan Direct delivery service, which saw a 25% gain in the French capital, Paris.
Auchan has also managed to stem to slowdown in market share in France, from a decline of 80 basis points in the first half of 2017 to a 20 basis point decline in the first half of 2018. It said that April and May showed the first market share gains for the first time in a year.
New Partnerships
The period was also significant for the creation of new partnerships, with Auchan recently entering into a new purchasing collaboration with Casino, Metro and Schiever, Horizon, which covers more than 40 countries in Europe, Asia and South America.
In China, its alliance with Alibaba was consolidated in November 2017, leading to the development of the Taoxianda O2O delivery service, while its Sun Art business entered into a strategic agreement with electronics distributor Suning in June.
Work To Do
“Auchan Retail's transformation programme is in full swing and our teams worldwide are working hard to implement it in accordance with our fixed guidelines and schedules," said Wilhelm Hubner, general manager of Auchan Retail.
"Our financial results do not yet reflect this energy and the significant progress that has already been made. Nevertheless, at the same time as continuing to invest to ensure this transformation's success and committing our teams both to reinventing our business and providing day-to-day services to our customers, we have managed, despite the circumstances, to maintain our levels of revenue.
"This commitment will continue in the second half of the year for the benefit of our customers and with a view to continuing our transformation. This gives me confidence for future years, as we are moving in the right direction.”
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine
