Leclerc: sales rise 2.9% in France

Jon Wright
Head of Insight - RA EMEA
@RetailAnalysis

Date : 12 February 2020

Leclerc said it generated €48.2 bn in France, including fuel, a rise of 3.4% on 2018, while excluding fuel the group said revenue rose 2.9% to €38.85 bn. Leclerc underlined the continued strength of its hypermarkets, noting the format had accounted for 54.8% of the additional sales generated by it during the year.

Stores continue to play a strong role…

Leclerc said sales through its stores rose 2.2%, while online its sales increased sharply, by 8.6%. The strength of its sales was aided by its private label ranges, which saw sales increased by 3.1%, aided by an investment in prices, which suggests that volume sales could have been higher. Leclerc said private label sales had risen by only 1.3% in France more widely, underlining the strength of its growth. Leclerc also said it had expanded the number of products it carries, invested in its locally-focused ranges and its fresh offer too.

…But digital is growing in importance…

Leclerc said ecommerce sales, including those generated through its Drives, rose by 8.6% to €3.5 bn, accounting for 23.8% of additional sales generated during the year.

We have recently been in-store at one of the newest Leclerc drive piéton (pedestrian drive) to see how the retailer is testing new services, including a food-to-go (FTG) counter, as it looks to extend its convenient solutions for shoppers. For more on this, read our article here.

…While other sources of revenue are growing

Leclerc noted, looking to short term growth opportunities, that it was aiming to drive sales through the addition of new services at its stores. From services like car rental to travel agencies, the addition of drugstores and, even, the sale of energy.

Net margin remains flat

Underlining the competitive nature of the market and what its rivals and manufacturers must contend with, Leclerc indicated its net margin was 1.9% in 2019. This level of net margin is similar to that which the group has reported for the last 10 years, showing how, despite market growth, margins have remained under pressure for a considerable time. It also indicates that this situation is unlikely to change any time soon, which will extend the pressure being felt by the likes of Auchan, Casino and Carrefour.

Investment to continue in 2020

Leclerc said the group had invested more than €1.0 bn over the course of the last four years to renovate stores, improve its supply chain and improve its structure to establish the right operating model to enable it to win in future. The 2019 results, it said, provided it with ‘a solid foundation for the 2020-2025 project’.

In the short term its investment programme will see it launch a single online presence for its non-food offer and services. It will also see it gradually extend the use of the Nutriscore labelling on its private label’s packaging, provide more precise indications of where the ingredients for its private labels come from and aim to reduce its use of plastic.