As part of its Q2 results statement, Casino discussed several strategic initiatives it had put in place during the first half of 2019 as it looked to improve its operations and financial position. In this article we look at the programmes it has implemented.
Cost savings plan
Casino began a cost saving plan to cut costs throughout its operations. This has seen it limit costs at its HQ and in stores, generate savings through better buying of goods not for resale and building synergies in the supply chain that delivers to its various banners. The success of the steps it took in H1 led it to increase its target to €130m for 2019, up from €100m initially.
Under its Rocade Plan Casino ‘launched a plan for the disposal and closure of loss-making stores’. Since its inception, Casino has sold 56 stores and closed a further 118. It said it will continue to sell stores where and when possible to help it reach its target of generating a €90m total gain in trading profit on a full-year basis. Following the end of the H1, Casino said it had sold a further three Géant Casino hypermarkets to Système U and Leclerc for €42m. It said the stores generated a trading loss of around €2m in 2018.
Acceleration of growth in fast expanding channels
As it looked to evolve its channel mix, to back the winners, Casino said it had nearly reached its target of opening 30 new premium and convenience stores in H1. To continue this success, it said it was planning to add a further 50 new stores in H2. At a product level, it said sales of organic products had risen 7.8%. On a channel level Casino said ecommerce sales had increased by 11.5%, with grocery ecommerce’s gross sales rising by 28%. The latter growth rate was ‘ driven notably by the partnership with Amazon’.
Other initiatives supporting outlook
Casino also highlighted how it had benefited from:
- Generating revenue from new businesses, such as energy, data and data centres
- Completing the disposal of Via Varejo for a total price of €615m
- The start of the process to simplify its structure in Latin America by combining all activities under GPA
- Continuing the sale of non-strategic assets such as store properties and the Vindémia subsidiary
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