The mass retail sector is undergoing a paradigm shift. After 2023, a year marked by rising food prices and the collapse of the giant supermarket chain Casino, new developments are on the horizon. Here are some explanations from the experts at AURIS Finance, a consultancy specialising in mergers and acquisitions.
It all started with the fall of an empire. That of Groupe Casino, which was €6 billion in debt. The retailer’s financial woes were compounded by rising food prices. With shelf prices 20% higher than rival E.Leclerc’s, the group was unable to retain its customers and bolster its margins. The Supermarché Casino and Géant Casino chains continued to burn through cash: in one year, they gobbled up €2 billion in cash and generated losses of €500 million.
A domino effect and a race to consolidate
The prospect of a takeover by Daniel Kretinsky, Fimalac, and the Attestor fund led to a restructuring of the group and the sale of a large number of assets. The Intermarché-Auchan duo acquired 288 shops with a total value of between €1.3 billion and €1.35 billion. The deal brought Intermarché 190 shops, about thirty of which will be sold to Auchan. Intermarché thus reaches the 20% market share threshold, putting it at the top of the French market. This move was immediately countered by the giant Carrefour, which in the summer of 2023 acquired 60 hypermarkets and 115 supermarkets under the Cora and Match banners for €1.05 billion. For Carrefour in France, this was a highly strategic acquisition that enabled it to win back market share.
E.Leclerc, a quiet winner
In this great market of hypermarkets and supermarkets, a few key players stand out by their silence. First and foremost is E.Leclerc, which has managed to increase its market share without making any direct acquisitions. In November 2023, according to Kantar, E.Leclerc outperformed its competitors, gaining 1.8 points of market share to reach 23.7%. This significant performance is matched by rising forecasts, with estimated profits of almost €2 billion and the addition of 600,000 new customers. Almost a quarter of all supermarket purchases are now made at E.Leclerc.
Hard discounters stand out from the crowd
Meanwhile, hard discounters continue to gain ground in France. In an uncertain macroeconomic context, consumers are very sensitive to the price argument. As a result, more and more consumers are turning to hard discounters. It’s a trend that goes beyond food. Action, a Dutch non-food hard discounter, is now the most popular store in France, with eight out of ten consumers having shopped there.
Our experts at your side
The series of mergers and acquisitions triggered by Casino’s financial situation has redefined the mass retail landscape in France. While E. Leclerc is holding its own without major acquisitions, others such as Intermarché and Carrefour have been actively reshaping their distribution networks. At the same time, the hard discounters continue their offensive. 2024 will see major new developments that will affect the entire value chain. AURIS Finance’s experts are specialised in various sectors. They will assist you in your search for financing and will be at your side for your acquisitions and sales.
