The retail industry is facing significant challenges due to rising operational costs, inflation, and increasing online competition. Intermarché, a major player in France, is responding by closing stores to protect profitability, with plans for more closures anticipated. This has raised concerns about job losses and access to essential goods in affected areas. To counter these issues, Intermarché is focusing on enhancing online sales, optimizing supply chains, and innovating through digitization and private label investment amidst potential new taxation.
The Retail Sector Faces Unprecedented Challenges
The retail industry is currently navigating through an extraordinary crisis, primarily driven by soaring operational costs. Inflation and rising labor expenses are significantly squeezing the profit margins of retail brands. Moreover, the rapid growth of online shopping is presenting intense competition, encouraging many consumers to opt for digital purchases. This shift is compounded by increasing tax burdens and stringent economic regulations enforced by the government.
Intermarché’s Response: Store Closures and Strategic Shifts
The interplay of economic and structural challenges is heavily influencing the business models of several prominent retail groups. Additionally, evolving consumer purchasing habits, which now favor short supply chains and local enterprises, are compelling brands to reassess their strategies. This is particularly true for Intermarché, a well-established name in the French market, which has announced plans to close a number of its stores to maintain its competitiveness.
To safeguard its profitability, Intermarché has opted to shut down numerous outlets in recent years. As of 2024, 30 stores have already closed their doors, with projections indicating that an additional 40 closures could occur in 2025. This trend carries significant implications, especially concerning employment, as Intermarché is a vital source of jobs in various regions. The prospect of job losses is a growing concern for both employees and labor unions.
In overseas territories like Réunion, the closure of Intermarché stores has notably affected the local economy. Locations in Saint-Pierre and Le Tampon have shut down, leaving many employees without immediate job reassignment options. Furthermore, in areas with fewer retail alternatives, the loss of these stores has limited residents’ access to essential goods, forcing them to travel further for their shopping needs.
Despite these hurdles, Intermarché is committed to bouncing back with a robust strategy to enhance its market position, currently holding 35.3% of market shares. The group is placing a strong emphasis on expanding its online commerce capabilities and streamlining its supply chain to cut costs. Additionally, Intermarché aims to set itself apart by investing in private labels and high-value-added products. Innovation plays a crucial role in this restructuring, with plans to digitize stores to enrich customer experiences and optimize shopping processes.
Taxation policies also play a significant role in this landscape, as the government contemplates an additional tax on large retailers in its 2025 budget. This proposal has raised alarms within the sector. Thierry Cotillard, the general director of the Les Mousquetaires group, has voiced his opposition, emphasizing the already slim profit margins (approximately 2%) that retail brands operate on. He warns that such taxation could lead to increased prices for consumers and further job cuts. To meet these challenges head-on, Intermarché must demonstrate both agility and innovation to thrive in the competitive retail market.