In detail, Auchan, which employs around 54,000 people in France, plans to cut 784 positions within its headquarters and 915 positions in stores. It provides for the cessation of direct home delivery activity which would result in 224 job cuts. And it plans to close around ten unprofitable points of sale (466 positions eliminated), including three hypermarkets in Clermont-Ferrand Nord (Puy-de-Dôme), Woippy (Moselle) and Bar-le-Duc (Meuse), and in a supermarket, in Aurillac (Cantal).
Far behind E.Leclerc, Carrefour and Intermarché
The group has several handicaps in France, even if it has financially solid shareholders, in the person of the Mulliez Family Association (AFM), also the owner of the lucrative Leroy Merlin or Decathlon.
First, Auchan's market share, at 9.1% at the last count, far behind E.Leclerc (24.1%), Carrefour (21.4%), Mousquetaires/Intermarché (17.4%) and Cooperative U (12.2%), leaves it less room for maneuver in its negotiations with agro-industrial suppliers.
To carry more weight, Auchan joined forces with its competitor Intermarché to buy together in an alliance lasting an unusually long 10 years.
Few franchises, stores too big
In addition, the group which owns its stores, with very few franchises, suffers from competition from E.Leclerc, Intermarché and Coopérative U.
These groupings of independent companies reduce operating costs as much as possible and social conditions are generally lower. This generally allows these stores to be able to sell their products at more competitive prices.
Another weak point for Auchan: the group has historically relied on the format of hypermarkets, the largest stores, but this is less popular today.