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We round up the latest format developments from Ahold Delhaize. The retailer is continuing the next phase of the Food Lion roll out in North America. Meanwhile it has acquired ten stores and has launched a new restaurant concept in Romania.

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France-based Auchan said in its Retail division, revenue had fallen by 3.3% at current exchange rates (0.5% at constant exchange rates) to €50.3bn. It said on a like-for-like basis revenue fell by 2.4%. Revenue dropped in every region in which Auchan operates.

France: revenue fell 1.3%

Auchan said in FY2018, revenue fell 1.3% in its home market. It said it was affected strongly by the ‘yellow vest’ protests at the end of the year. It estimated that the protests had negatively impacted its revenue by €140m and its EBITDA by €35m.

On the positive side, the company said its 125 days promotion had been a success, until the demonstrations started, and had led to a 4.5% rise in revenue at its launch in October. During the year Auchan completed the conversion of Simply Market stores to Auchan Supermarché. Finally, it noted that by the end of 2018 it had 100 responsible sourcing channels in place.

Southern Europe sees ‘mixed results’

Across its three country operations in southern Europe revenue decreased by 0.7%. Auchan said it had enjoyed ‘solid results’ in Portugal and Spain but suffered ‘a marked decline in momentum in Italy amid sluggish consumption and more intense competition’. In an attempt to stem its losses in Italy Auchan said it had closed 23 stores in the country during 2018, including two hypermarkets.

Russia drags down results in Central and Eastern Europe

In Central and Eastern Europe, Auchan reported revenue fell by 1.4% at constant exchange rates. While Hungary, Poland, Romania and Ukraine had all shown growth, revenue in Russia contracted. Auchan closed 11 stores in Russia in an attempt to turnaround its performance, which it did simultaneously with the introduction of its new business model in the country.

Revenue falls 2.6% in Asia

At constant exchange rates Auchan said revenue had fallen by 2.6% during 2018. It said the drop was ‘mainly as a result of the concession agreement with Suning regarding the sale of home electronics and appliances in stores [which meant] the revenue derived from these sales is no longer taken to Sun Art Retail’s accounts’.

On the positive side, it noted the alliance with Alibaba had led to notable changes, such as the digitisation of 484 Sun Art stores ahead of schedule. For more on Sun Art’s results, see our news story here. Meanwhile, for coverage of the change in management at the company following the results, see our store here.

Performance leads to implementation of ‘Renaissance’ action plan

While the company confirmed its commitment to its long-term Vision 2025 strategy, it said it was ‘to adopt a simpler approach and centre its efforts on turning profits around’. This new initiative would focus on two key areas:

  • In the short term: it would look closely at where the retailer is losing money and take whatever steps are necessary to stem the losses. Italy and Vietnam were identified as countries where it is ‘durably loss-making’, while it was aiming to close 30 stores in Russia and three in China in 2019. However, France seemed to escape some of the focus, with staffing levels and hypermarkets to remain untouched. Investment would be scaled back in 2019
  • In the medium term: this will lead it to improve its food offer, work in support of local areas, become more customer-centric and build out an innovative ecosystem with its partners

France-based Les Mousquetaires said its total sales rose 5.9%, excluding fuel, and by 7.7%, including fuel, across its operations in Europe. The organisation was able to report a positive performance at all its divisions, with its retail brands generating sales of €40.5bn, including fuel, and its agribusiness division producing €4.0bn.

Good performance at a group level

Les Mousquetaires said its Intermarché and Netto banners generated a combined turnover of €27.0bn, excluding fuel, and €36.5bn, including fuel.

…Driven by France…

In its home market, Les Mousquetaires said Intermarché enjoyed sales growth of 2.9%, to €23.06bn, excluding fuel, and €31.5bn, including fuel. Les Mousquetaires said 2018’s performance outstripped that for the two preceding years: sales rose 1.3% in 2016 and 1.7% in 2017.

The organisation said the pace of sales growth had enabled it to gain market share and underlined the positive effect of its transformation programme. The initiative has put a greater focus on helping shoppers to eat better and how goods are produced better.

At Netto sales rose 1.9% to €1.1bn, excluding fuel, and €1.27bn, including fuel. The pace of sales growth at Netto was the same in 2018 as versus 2017, but lower than that it enjoyed in 2016, at 3.9%. Les Mousquetaires said Netto’s performance had been boosted by shoppers’ search for value.

…And replicated in Belgium and Poland

Outside its home market, Les Mousquetaires reported a positive performance. In Belgium it said Intermarché had led the market in terms of sales growth, reporting that sales had risen 7.5% in 2018.

In Poland, Les Mousquetaires saw sales rise 5.5% to PLN7.5bn (€1.7bn) across its two banners, Intermarché and Bricomarché. By business, Les Mousquetaires said sales had risen by 3.4% at Intermarché, to PLN5.2bn (€1.2bn) and by 10.3% at Bricomarché to PLN2.3bn (€0.5bn). During 2018 Les Mousquetaires invested PLN100m (€23.3m) in its operations in Poland to open new stores, lower prices and operate more eye-catching promotions.

At a net supermarket level, Les Mousquetaires ended 2018 with one fewer store in Poland after opening four and closing five. In 2019, Les Mousquetaires will aim to open four new stores in the country, while also investigating opportunities to add Drive collection points.

As Auchan looks to drive its Vision 2025 strategy faster it has announced operational changes in France and the launch of Horizon International Services. Meanwhile, at a local level it continues to evolve its channel presence, driving growth in its small store estate and with its online fulfilment.

Horizon International Services is officially launched

Following approval from the relevant competition authorities, Auchan, Casino, Metro and DIA have officially announced the launch of Horizon International Services. First announced in July 2018 the alliance will cover 47 countries across Europe, Asia and Latin America where the four companies operate.

Announcing the launch, a press release from Metro said: “Horizon International Services will enable Auchan Retail, Casino Group, METRO and DIA to pool their resources to forge balanced and innovative relationships based on a catalogue of common, scalable services, in the best interests of all actors in the supply chain, from the manufacturer through to the consumer.

Auchan Retail France appoints new management committee

Lineaires has reported that Auchan Retail France has established a new management committee. The new structure will see the retailer move away from organising itself by channel, choosing instead to group itself into eight multi-format geographical regions and one that covers franchising and partnerships.

The new management committee, with someone to be appointed to the Grand-Est region in the future, will be made up of:

  • Serge Lalleman, Nord-Pas-de-Calais
  • Olivier Barbry, Normandie / Picardie / Littoral
  • Christophe Carreyre, Centre / Loire-Atlantique
  • Frédéric Davignon, Île-de-France / Paris intra-muros
  • Olivier Louis, Île-de-France / Paris grande couronne
  • Béatrice Felter, Auvergne / Rhône-Alpes
  • Anthony Nobis, Occitanie / Méditerranée
  • Emmanuel Zeller, franchising and partnerships

Auchan reopens Pedestrian Drive in Paris…

Adding further to the competitive environment in Paris, Auchan has reopened its Drive site in rue Saint-Charles in Paris under the Auchan Drive banner. First opened in April 2014 the store enables shoppers to collect orders made on auchandrive.fr, auchan.fr and through its app between two to four hours of making the purchase.

…Expands partnership with OMV for MyAuchan banner in Romania

Auchan and OMV have signed a Memorandum of Understanding (MoU) that could lead to the expansion of their partnership. If carried through the MoU could lead to the addition of further MyAuchan stores on the latter’s forecourts. The two companies have been working together since 2017, when the trial of 15 MyAuchan stores on OMV’s forecourts began. The stores were opened in both urban and rural areas to enable the two to test the effectiveness of the business model.

Commenting on the results, OMV’s directorate for downstream oil, Radu-Sorin Caprau, said: “The results so far are encouraging, and we are happy to negotiate the expansion of the partnership and have more MyAuchan proximity stores on our Petrom stations. This association aims to add more substance to the promise of the Petrom brand, with MyAuchan stores perfectly complementing Petrom’s classic benefits: affordable, efficient fuels and stations anytime…

For subscribers wanting more on Auchan’s outlook, read our strategic outlook for the retailer.

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Key presentation

Central and Eastern Europe is a region that illustrates great growth potential for both retailers and suppliers. The region also presents opportunity for retailers to evolve their business model to widen their shopper base and draw more traffic to their stores.

Europe is often overlooked and dismissed as a low, slow growth region. However, our in-depth look at the key countries and their expansion opportunities shows how the region is set to enjoy good growth to 2023.

We've developed a single, universal methodology for calculating food and consumer goods retail data, supported by our programme of primary and secondary research. This makes Retail Analysis the most reliable and robust source available for data of this type. 

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