Job cuts would be “dramatic for many employees”, a large number of whom “already work at very tight times”, underlined Gilles Martin, retail union representative CFDT Auchan France.
“Reasons” to tremble
On Sunday, the specialist in the mass distribution sector Olivier Dauvers estimated that “if the unions are trembling, it is because there are reasons”, in particular because “the difficulties” of Auchan in France “have been going on for years been covered by international activities.
But since Russia’s invasion of Ukraine, the distributor’s very profitable Russian branch no longer plays this role. In recent days, press reports have mentioned the sale of this Russian subsidiary. Auchan Russia, which employs around 30,000 people, told AFP it would not comment on “rumors on the market”.
In France, several factors explain the difficulties of the distributor, the 5th largest player in the French market. First, its market share, at 9.1% at the last count, far behind E.Leclerc (24.1%), Carrefour (21.4%), Mousquetaires/Intermarché (17.4%) and Coopérative U (12.2%).
This data is important in the balance of power with agro-industry suppliers: the greater the market share, the more inclined they are to grant better conditions of sale for the products then placed on the shelves. This is despite the fact that price is the first purchasing criterion for the vast majority of consumers.
To overcome this pitfall, Auchan joined forces with its competitor Intermarché to buy together in an alliance lasting an unusually long 10 years.
Reduction of surfaces
In addition, the group is, like Carrefour, built on an integrated model. It suffers from competition from E.Leclerc, Intermarché and Coopérative U, groups of independent companies which minimize support functions as much as possible and where social conditions are generally lower. This allows these stores to generally be more competitive in on-shelf sales prices.
The new general director of the Auchan group, Guillaume Darrasse, comes from this world of independents. He was previously Deputy Managing Director at U.
Another weak point: Auchan, which bought around a hundred stores from its struggling competitor Casino, is historically strong in the hypermarket format, the largest stores, which are less popular today.
The distributor hopes to reduce the commercial space of a certain number of them, wishing to offer other brands the opportunity to set up on the vacant space.
The group had already announced in September 2020 the elimination of 1,475 positions in France, after a voluntary departure plan of more than 500 positions in January 2020.
