Following the announcement it was to sell six hypermarkets to Leclerc earlier in 2019, Casino has announced further disposals. The sale of stores and its contract catering services company, R2C, will help it focus and invest on its core retailer operations, improve profitability and enable it to pay down debt.

Store disposals to generate €42m

Casino said it will sell 18 integrated stores and 16 sites that it owns in conjunction with master franchisees. Most of the stores, 33 of the 34 being sold, will be to Lidl, with the final one being to a Leclerc member. The 33 stores being sold to Lidl consist of 17 Leader Price, 15 Casino Supermarchés and one Hyper Casino. The store disposals are expected to be completed in the first half of 2019.

Casino said the 34 stores generated combined net sales of €148m and a total trading loss of €21m in 2018. Thus, while Casino’s top line sales growth will be affected, its profitability will benefit due to the removal of the loss-making stores from its estate.

Sale of R2C to Compass to be completed too

Separately, Casino also announced the sale of its contract catering services group, R2C. As with the store disposals the retailer said it expected the transaction to be completed in the first half of 2019. No financial details were released as part of the announcement, but Casino did note that ‘with this operation, the Casino Group is pursuing the initiatives already under way to significantly increase its profitability and strengthen its financial profile, in line with its strategic priorities.’

Growth opportunity for Lidl

The acquisition for Lidl is aligned with the discounter’s expansion plans across Europe. The Leader Price and Casino Supermarchés stores’ size will fit well with Lidl format. It will accelerate the retailer’s pace of growth, support its aim to operate more than 1,600 stores in France and enable it to enter new locations with limited investments.

For subscribers wanting to know more about the French market, please have a look at our country presentation.

France-based Casino has announced it will sell six of its Géant hypermarkets to Leclerc for €100.5m.

The hypermarkets are among the least performing…

The selected hypermarkets are located outside Paris in the towns of Anglet, Castelnaudary, Castres, Cholet, Dole and Saint Grégoire. Leclerc expressed an interest in the stores when Casino first announced its decision to sell certain loss-making stores.

Casino said the six Géant hypermarkets are among the least performing in the network. They represented combined net sales of €150m and generated a total trading loss of €8m in 2018. Commenting on its decision Casino said, “Reducing these losses will contribute to the group's growth objective in trading profit in France…”.

The selling of the stores is expected to be completed in the first half of 2019, subject to regulatory approval. Casino said the Géant banner will continue to concentrate on its strategic priorities by focusing its development on digital synergies and its organic product offering.

…Impacted by anti-government protests

Casino reported a slowdown in revenue growth in Q4 due to anti-government protests in France impacting business. Chief financial officer David Lubek said that the impact was “mostly felt at Géant, with around 30% of stores touched by significant blockades”.

He added, “There was also some impact at Monoprix and Franprix due to demonstrations on Saturdays and a reduction in tourism in Paris at the end of December, and finally a slight impact in Supermarkets where around 15% of the stores were somehow affected”.

Casino has reported FY 2018 net sales of €36.6bn, up 4.7% on an organic basis and 3.0% on a same-store basis. Q4 2018 net sales were €9.9bn, up 5.1% on an organic basis and 3.6% on a same-store basis.

France: protests causing a Q4 sales slowdown

In Casino’s home market, Q4 2018 sales rose by 1.4% overall, up 0.2% on an organic basis and 0.5% on a same-store basis. FY 2018 sales increased by 1.4% overall, up 1.2% on an organic basis and 1.3% on a same-store basis. Casino attributed the Q4 slowdown to the ‘yellow vest’ protests in France during the period. Its convenience store network and presence in inner cities helped to minimise the effect of the protest and traffic roadblocks. Read the retailer's Q3 results here.

Source: Casino

Source: Casino

 

Monoprix

 

• Double-digit growth in ecommerce sales; ecommerce accounted for 18% of activity in France in Q4 2018, driven by Amazon Prime Now and the Monoprix.fr fashion business
• Good momentum in food, with sales of organic products up 13% in Q4 2018
• 12 new stores opened in Q4 2018, 9 of which under the Naturalia banner

Casino supermarkets

• New concept stores helping growth, with the first 24/7 store opened in Lyon
• 20% increase in organic product sales

Franprix

• Sales impacted by the drop in tourism throughout December
• It is continuing to innovate with food-to-go
• The “le drugstore parisien” concept is performing well, and enhanced it beauty offer

Géant hypermarkets

• One third of the network was affected by the social unrest at the end of the year, negatively impacting total sales
• 21% growth in organic products
• The shift to digital was accelerated, with its drive-through store network expanded

Convenience

• The development of fresh and organic ranges aided sales growth

Leader Price

• 112 stores have been refurbished, boosting same-store sales
• The development of fresh market areas and other successful marketing initiatives also helped to grow sales

Cdiscount increasing net sale

Expanding its marketplace was a priority in Q4 2018. Marketplace and direct sales were both up in Q4 2018 compared to the same period last year. Website traffic, mobile traffic contribution, and active customers all increased in the quarter compared to 2017. Cdiscount also registered a record Black Friday performance.

Latin America positive organic and same-store growth

Sales rose by 10% on an organic basis and 6% on a same-store basis in Q4 2018. Hyperinflation and a negative currency affected consolidated net sales. Both GPA Food and Éxito Group increased their organic and same-store sales. GPA Food’s growth was driven by a continued increase in volumes and customer traffic at Assaí, whilst renovations at its other banners improved same-store sales.

Sign-up here to receive our free newsletter that will keep you up-to-date about the latest news and developments from Casino and other global retailers.