2,300 jobs lost, around ten stores closed… How can we explain the decline of the brand?

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“We expected it,” breathes Pierre Fostier, Force Ouvrière Auchan union delegate and member of the CSE of the Mulliez group company. “Things have not been going in the right direction for years. »

Auchan unveiled this Tuesday, November 5, 2024 a project of large-scale social planthreatening 2,389 jobs in France, notably through the closure of around ten stores. A sign of decline for the fifth player in the French market, which has suffered financial disappointments for several years.

A shock, but not a surprise. Except perhaps for Michel Barnier, who declared, this Tuesday, after the announcement of the draft social plan, that he wanted to “know what Auchan (and Michelin) did with public money [qui leur a été donné] ».

A constant decline in attendance

Since 2012, the Auchan group has faced a constant decline in footfall in its stores and its turnover. “We had warned [les dirigeants] », however supports Pierre Fostier.

“Over the period, and before the integration of the Casino stores, its market share fell from 12.1% to 8%its revenues fell by 2.26 billion euros,” explains the company in a press release, consulted by actu.fr.

Expensive projects

In question, several particularly expensive projects launched by the historic chain of stores of the Mulliez family. The union delegate Pierre Fostier retains, above all, the establishment of a “new collection process”, that is to say automatic checkoutsat the exit of the stores.

Originally, the project was to cost 98 million euros, “in the end, the company had to spend more than double the amount to put it in place,” he assures.

And, the latter risks continuing to increase: during the presentation of its “return to growth plan” to union representatives this Tuesday, the brand mentioned “wanting to fight against theft at self-checkouts by installing cameras using AI,” reports Pierre Fostier.

This project, for which we had nevertheless been consulted, was launched against the advice of the social and economic committee (CSE), and against that of the experts it mandated.

“However, we had shown that there were certain points that were harmful to customers, turnover, but also to the working conditions of employees,” he underlines, referring to a repeated situation.

The “death” of the company’s know-how

The member of the group's CSE also highlights the impact of the implementation of a new organizational model, called the “PACTE project”, which would have caused a significant number of resignationsfrom the year 2020.

“With this executive restructuring project, many successful executives have left the company. But, in the end, there were too many departures and we had to hire new, less competent people,” explains Pierre Fostier. “It killed the know-how of the company. »

Above all, Auchan has followed in the footsteps of other giants in the sector by developing hypermarkets, disproportionately. “With 311 supermarkets and 30 local convenience stores as of June 30, 2024”, according to information from Echoesthe group is “structurally too present in large hypermarkets”, he believes in his press release.

In the future, it plans to “invent new store models” and revisit “the model of its supermarkets”.

The price war

Since 2012, and before the integration of the Casino stores, Auchan indicates that it has seen its market share fall from 12.1% to 8% in an “ultra-competitive” context.

” Alone, [l’entreprise] will not be enough to generate the necessary margins to offer competitive prices. To get back into the match, Auchan must lower its costs et
simplify its organization,” recognizes the brand in a press release.

In order to improve its purchasing conditions over the long term (ten years), the group has formed an alliance with Intermarché to purchase jointly.

A whole model in question

In addition, Auchan, like Carrefour, operates on a integrated model – it owns its stores -, unlike brands like E.Leclerc and Intermarché which bring together independents. This integrated model generates higher operating costs weighing on price competitiveness.

The “plan to return to growth in France” goes in this direction according to the brand, since it considers it necessary to “return to a more attractive price positioning” to revive the company's activity.

Concretely, Auchan wants to lower its prices which he now considers too expensive.

Unstable governance

Founded and managed by Gérard Mulliez until 2006, the brand subsequently saw several managers succeed one another at its head. Vianney Mulliez from 2006 to 2017, Edgard Bonte from 2018 to 2021, Yves Claude from 2021 to 2024 then, very recently, Guillaume Darrasse, appointed in August to redress the situation.

“We change direction every two years,” regrets the union delegate. “It’s been a long time since we lost the compass” that was supposed to guide the company’s strategy.

Here again, Auchan acknowledges having lost “its merchant DNA”since the group reaffirms, in its press release, the need to “reconnect” with it. Questioned by actu.fr on the reasons for its decline, the group refers us to its only press release.

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