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Large distribution. A low social butchery

Too big, too unprofitable, too competitive: hypermarkets would be in crisis, are we hammering on the side of the big supermarket managers who, for years, are redirecting their strategies towards the internationalization of their activities, the multiplication proximity signs, the reduction of non-food, the development of bio or e-commerce. Plan Bompard at Carrefour, Vision 2025 at Auchan, sales of stores at Casino … the leaders of supermarkets are restructuring all-out, arguing with sales at half mast. Strategic decisions at high human cost. "These three major groups have destroyed more than 10 000 jobs in 2018 alone," warns the CGT trade, which calls employees of large retailers to participate in strike movements this Friday and Saturday.

Restructuring costs weigh heavily in the balance

To justify these job cuts, these groups show declining results. But for the experts of Progexa, a firm of economic expertise that assists staff representatives, these data are questionable. Carrefour, which has announced plans to offload more than a thousand of its employees in the coming months, turnover has certainly decreased by 3.0% in 2018, or 2.3 billion euros . But this trend is largely due to an unfavorable currency effect, linked to the devaluation of the Brazilian real and Argentine peso. At constant exchange rates, sales increased by 3.4%. In the end, the group posted losses of 344 million euros on 2018. But, again, this apparent poor performance does not reflect a decline in activity, because what weighed heavily in the balance in 2018, are the restructuring costs! Thus, the 2,400 job cuts in France, the thousand in Argentina and the reorganization in Belgium concerning 1,000 employees have burdened the banner's budget by 727 million euros in 2018. Another proof that these results are to qualify: against its investors, Carrefour knows how to present its accounts in a more optimistic way. Putting forward an adjusted net profit up to 802 million euros in its financial communication, Alexandre Bompard, CEO of the group, described as "encouraging" the figures recorded by the brand in 2018, likely to "enhance a certain number of objectives (…) defined by 2022 ".

At Auchan, it was also currency effects that impacted the group's results, down 3.2%. Excluding the exchange rate, the proceeds of ordinary activities earned by the brand at the robin remained stable. The commercial margin rate even improved by 0.5%. But the group's decision to write down assets worth 1.1 billion euros weighed heavily in the financial year. This allowed Auchan to present, in 2018, losses amounting to 946 million euros.

On the Casino side, sales of stores to competing brands such as Lidl and Intermarché are well underway, threatening employee collective benefits. However, here too, the economic situation is really not catastrophic. The group of Jean-Charles Naouri boasted even to have realized in 2018 its "best organic growth for five years" with a rise of 2.8% of the volume of business, a growth of the current operating profit of distribution of 15% and an improvement in profitability of 0.2 points "in continuity with previous years".

Other indicators show that these signs are far from agony. For example, the CGT figures at "more than 1 billion euros" the amount of dividends paid by the three heavyweights of trade to their shareholders. Despite the losses posted, Carrefour shareholders, for example, benefited from € 352 million in dividends for the 2018 financial year.

A hexagonal market that does not hurt so badly

Although hypermarkets are less popular, the major groups on which they depend manage to absorb changes in consumer habits overall, since they also hold credit or real estate subsidiaries, local retail networks, and major e-commerce sites such as Cdiscount for Casino or Rue du Commerce for Carrefour. All in a hexagonal market that is not so bad. "Non-specialized retail store sales with a predominance of food rose by 4.4% in value in 2018, its highest growth rate since 2011. In terms of volume (excluding the price effect), growth was 3.5%, also the highest growth over the period observed, "acknowledged the FCD, the employers' federation of large retailers, however, estimating these figures of INSEE" overestimated ", without however, to provide precise counter-arguments.

Although the value of these figures is therefore quite relative, the strategies developed by companies on these bases have, they, very concrete effects: "Since 2014, more than 30 000 jobs were destroyed in the large distribution", denounces the CGT. In this labor-intensive sector – 660,000 employees – the wage bill remains the number one adjustment variable.


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