the “concentration” phenomenon of mass distribution “is launched”, assures a specialist in distribution and consumption

More than 300 Casino hypermarkets and supermarkets will be bought by Intermarché and Auchan. The distribution and consumption specialist, Yves Puget, confirms on franceinfo that a concentration phenomenon is well underway, accelerated by e-commerce and the crisis.

In financial difficulty for several months, the Casino group announces that it has entered into exclusive discussions with a consortium bringing together Auchan and Intermarché. More than 300 hypermarkets and supermarkets under the Casino brand should be sold to them. According to Yves Puget, guest of franceinfo and specialist in distribution and household consumption, it does exist “a phenomenon of concentration“, accelerated “by Covid, the war in Ukraine and e-commerce“.”But as long as there’s competition, it’s okay“, assures the editorial director of LSA magazine.

Franceinfo: Will the disappearance of the Casino brand change the fortunes of mass distribution?

Yves Puget: Concentration is underway. It was launched last July, with the acquisition by the Carrefour group of Cora and Match. We can clearly see that there is a phenomenon of concentration. And why ? Quite simply because there are a lot of actors in France, no offense to those who say the opposite. And in addition, we must integrate “climate laws”: in the coming years it will become increasingly difficult to open stores for reasons of land artificialization. Indeed, everyone says that today is the time to gain square footage. So there is a phenomenon of concentration and it is perhaps not over yet.

This concentration phenomenon in general is not very good for the consumer ?

As long as there is competition, and I can assure you that the competition between distributors is tough, that’s fine for the consumer. There are still a lot of distribution groups in France, especially if we compare the Netherlands or other countries. Everything has accelerated with two phenomena: the rise of e-commerce which continues to gain market share, and the Covid crisis then the war in Ukraine. And all this has accelerated the decline of certain actors. In the non-food sector, it is obvious: almost every month, we learn that there is a brand that will disappear. In the food industry, there are also stores that are doing poorly.

So, if Casino cannot do it and has to sell more than 300 stores, why would Auchan and Intermarché succeed then?

They are two very different companies. Auchan is an integrated, family group, which takes time and is more focused on the hypermarket. So it will take over the vast majority of hypermarkets from the Casino group. Intermarché are independents, so they are store owners who will buy stores. But he’s more of a supermarket specialist. And, not only are they making a global offer, but they actually have a partnership that they are going to launch for purchases, knowing that Casino and Intermarché, within a center called OXO, are already partners . Because it’s good to be good and powerful in stores, but you also have to be good at purchasing. And that’s the whole question of purchasing centers.

Auchan and Intermarché have committed to taking on all employees. But we know very well that there will be investments necessary to modernize the stores that will be taken over. Is this promise to maintain the number of jobs sustainable in the long term?

There are actually several questions. There is the check to “pay for” the stores. Afterwards, there is another check to do: it is the renovation of the points of sale. And these are very often points of sale which have suffered precisely from a lack of investment. It is often said in the trade that it takes around €1,000 per square meter to renovate a store park. Afterwards, socially, Auchan is a very responsible brand. So I would say that there is nothing to fear for Casino employees. Afterwards, yes, there were gaps. We know very well that payroll at Lidl is around 6% of turnover and at hypermarkets it goes up to 12%… So I understand the concerns, they are logical. Afterwards, I think it is better to be taken over by a brand that is doing well than to continue its slow decline, as has been the case for years for brands in the Casino group.

Then there is the subject of logistics. Indeed, the twelve warehouses, perhaps Intermarché and Auchan will be able to take over some of them. Afterwards, the logistics market is doing well. These warehouses will certainly not be abandoned, there could be buyers. And for the Saint Etienne headquarters: there are approximately 1,700 people. There, there are real questions about the future. It must have been a debate during the negotiations, Auchan and Intermarché had to make commitments, particularly with Bercy.