NARRATIVE. Auchan: how the brand went from a champion of mass distribution in the North to a group in difficulty

In the 1980s, Auchan praised “the Auchan life” in its advertisements, in opposition to “the austere life”. The brand promised quality and low prices. Today times have changed a lot. With the announcement of 2,400 job cuts on Tuesday morning, austerity is hitting the mass distribution brand hard.

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For Auchan, it all started in July 1961. Carrefour and E.Leclerc had already opened stores in France. Gérard Mulliez, son of the founder of the textile company Phildar, launched into mass distribution and opened his first supermarket in a former abandoned textile factory. To find the name, he was inspired by the district where the premises are located in Roubaix in the North: the Hauts-Champs district. The store takes the name Auchan. In 1967, he opened a second store, this time a hypermarket, in Roncq in the North. Two years later, new hypermarket in Englos in the Lille metropolis. Surrounded by vast grounds, intended to accommodate a shopping mall and other stores, it prefigures the shopping centers we all know today.

Auchan present throughout the North

In the 1970s, Auchan multiplied its model throughout Nord-Pas-de-Calais. Valenciennes, Noyelles-Godault in the mining basin, Béthune, Boulogne-sur-Mer, Villeneuve-d'Ascq… The brand is established in all the major towns in the region at a time when competition is low. Customers find everything under one roof in dozens and dozens of departments. A first hypermarket opened outside the original lands in Fontenay-sous-Bois in Val-de-Marne at the end of the 1970s.

Conquering the world

At the beginning of the 1980s, few French people knew the Auchan brand, but the northern group wanted to conquer the world. Spain in 1981 where Auchan was renamed Alcampo (literal translation of “in the field”), the United States in 1988, Italy in 1989, Portugal, Luxembourg and Poland in 1996, Russia and Morocco in 2002, Romania in 2005, Ukraine in 2007… Since then, Auchan has withdrawn from several countries and is established in 12 countries around the world.

At the same time, Auchan wants to expand to other regions of France but the law strictly regulates any new commercial establishment. In 1996, Auchan launched a takeover bid for the Docks de France group which owned 75 Mamouth hypermarkets and Atac supermarkets. Three years later, the Mamouth brand disappeared in favor of Auchan, which was able to affix its logo and set up in the South in Toulouse, Clermont-Ferrand, Tulle… In 2000, Auchan achieved a turnover of 14.9 billion euros in France excluding fuels.

Drive, digital, delivery

In 1999, Auchan launched its private label products. The year 2000 saw the invention of a new way of shopping with Auchan Drive. In 2001, the Auchandirect e-commerce site was created. Five years later, it is the turn of auchan.fr with the online sale of home equipment. In 2009, the group opened its 500th supermarket worldwide.

To have more influence on prices, in favor of its customers, Auchan formed an alliance with Système U in 2014 to purchase their national brand products via the Eurauchan purchasing center.

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Three reconciliation operations failed

Despite this dynamic, all is not rosy. The golden age of the hypermarket of the 70s and 80s is over. “Last year, we lost turnover and margins but we regained customers by getting back up to speed on prices,” explained in an interview with LSA in 2015 the food purchasing director of Auchan Pierre-René Tchoukriel. An Auchan – Système U marriage project was considered but failed in 2016 as their models were so different. In 2021, a project to take control of Carrefour is on track but it fails after several months of negotiations. In 2023, a merger of Auchan with the Casino group, already in bad shape, is under study but Casino ultimately does not follow through. A year later, following the dismantling of the Casino group, Auchan made a costly purchase of 98 Casino stores (26 hypermarkets, 70 supermarkets, 2 drives) in territories where the group was not really present in France . To carry out this buyout, the Mulliez family association carried out a capital increase of 400 million euros.

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The hypermarket, an out-of-fashion model?

Auchan has always believed in the success of the hypermarket. It has 161 hypermarkets in France of up to 15,000 m². In recent years, however, consumption patterns have changed. The brand has tried to adapt to this. By buying Mamouth, Auchan also inherited the Atac supermarkets, called Simply Market in 2009 and today Auchan supermarket. Likewise, in city centers, Auchan has opened A 2 Pas urban convenience stores renamed My Auchan.

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With the war in Ukraine and high inflation – up to +20% in 2023 – Auchan has become too expensive for some of its customers in an ultra-competitive sector facing E.Leclerc or Intermarché. The northern group also formed an alliance in September with Intermarché to create a joint purchasing center, Aura retail, and to be stronger in negotiating prices with major international manufacturers.

Over the past 12 years, Auchan has lost more than 4 points of market share. It now holds a 9% market share compared to more than 24% for E.Leclerc, which takes full advantage of its price image. Financially speaking, Ebitda – gross operating surplus – has been divided by six in 10 years. With 16 billion annual turnover, Auchan is only the fifth largest food distributor in France. Auchan life in turn experiences austere life.