Action is now the French public’s favourite shop, ahead of brands such as Décathlon, Leroy Merlin, and McDonalds. Thanks to its unique model, the Dutch non-food hard discounter has carved out a place for itself in France. Experts at AURIS Finance, a consultancy specialising in mergers and acquisitions, take a closer look.
Eight out of ten French people have already shopped at Action. These are the results of EY-Pathenon’s annual “French Favourite Retailers” survey, published in April 2023. While Leroy Merlin and Décathlon have shared the top spot since 2020, in 2023 it is Action that leads the way with 46% of fans, compared to 42.5% for Décathlon and 39.9% for Leroy Merlin.
Inflation vs. low prices
The brand’s originality lies in its ability to offer a wide range of products at low cost, from stationery and home decor to hygiene products, clothing, toys, and small electronics. Volume and low-cost production are the two keys to the company’s strategy, helping to keep prices down. In shops, a quarter of the products are sold for less than one euro. To build customer loyalty, the company focuses on regular promotions and on the diversity of its product range, with 150 new products offered each week. Another unique feature is that only 35% of the range is made up of regular products. This is a concept that is particularly popular in times of inflation, and also applies to non-food products. In a gloomy economic climate, consumers are still looking for low-cost, pleasurable purchases. A windfall for a retailer like Action.
A new shop opening every week
But the hard discounter’s success cannot be explained by inflation alone. Action ranked ninth in the hearts of the French in 2020, seventh in 2021, third in 2022, and first this year. This success is underpinned by Action’s ubiquitous presence in France: outside Paris, 90% of French people now have an Action shop within twenty minutes of their home. With 700 shops, France is one of the brand’s strategic markets. Action intends to increase this number to 800 by the end of 2023. To achieve this, the group has adopted an offensive strategy, opening one new shop per week, mainly in suburban and rural areas.
Rapid expansion
17,000 people currently work in Action shops in France. Although the hard discount chain was founded in 1993, Action took on a new dimension in 2011 when it was acquired by the British private equity fund 3i Group PLC. Thanks to the strength of the fund, the company has stepped up the expansion of its points of sale in Europe and now has a very dense territorial network. The group is present in eleven countries with 2,250 shops and has a turnover of three billion euros in France.
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