The ax has fallen. The distributor Auchan presented this Tuesday, November 5 to its staff representatives a draft social plan threatening 2,389 jobs in France, in particular through the closure of around ten stores, management said. The company assures in a press release that it is“a plan to return to growth” with “a new commercial project, a more attractive price positioning and an overhaul of its model”. “This reconquest plan requires responsible decisions,” justifies Auchan, with a “profound transformation” and one “new organization” of the company.
In the detail of this “job protection plan”the store brand, which employs around 54,000 people in France, will cut 784 positions within its headquarters and 915 positions in its stores. The company plans to stop the direct home delivery activity, which would result in 224 job cuts. And it wants 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), as well as 'a supermarket in Aurillac (Cantal). The distributor assures that there will be “a phase of voluntary departures” and that “each employee concerned will be supported to find a lasting employment solution”.
Auchan, long the flagship of the Mulliez galaxy, has been in bad shape for several years. “The difficulties” from the distributor in France “have for years been covered by international activities”, explains the specialist in the mass distribution sector Olivier Dauvers. 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, which for its part refuses to comment. “rumors on the market”.
Auchan struggling against its competitors
Since the collapse of the Saint-Etienne Casino group, where a PSE is also underway and could affect more than 3,000 jobs, Auchan is regularly cited as the worst-off in large-scale food distribution. 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%). This leaves it less room for maneuver in its negotiations with agro-industrial suppliers.
To carry more weight, the distributor joined forces with its competitor Intermarché to buy together in an alliance lasting an unusually long 10 years. The group also owns most of its stores and manages very few franchises. He now wishes “revisit[r] the model of its supermarkets to attract more franchise partners. These groupings of independent companies reduce operating costs as much as possible with generally lower social conditions. 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 hypermarket format, but this is less popular today. In his press release, he announced “the gradual resizing of around sixty of them”. Over the first six months of 2024, Auchan's holding company, Elo, suffered a net loss of nearly a billion euros. Last year, it suffered a net loss of 379 million euros with declining sales. However, inflation had boosted the sales of most of its major retail competitors.
Updated at 11:20 a.m. with more context.
