The same scene played out no less than 74 times in 2023. Each time, the observation is the same: customers come running. Like at the end of December, when Action planned to inaugurate its second store in Paris, in the 19th arrondissement. The security commission, obligatory for the opening of an establishment open to the public, is delayed. After hours of waiting, the brand new 1,400 square meter space finally received the green light. “No one knew when we were going to open and yet, in less than an hour, the store was full,” remembers Robin Roy, director of operations for Action France.
The company, based in the Netherlands, limits its marketing expenses as much as possible and had not even communicated about the event. In reality, she doesn’t need it, word of mouth and social networks do the work for her. “It benefits from free viral marketing,” underlines Noria Cung, co-founder of the retail expert firm Pixis Conseil. The madness around the brand can also be seen in the street, where white shopping bags stamped with the distinctive blue logo abound.
Arriving in France in 2012, Action has carved out a place of choice among discounters, alongside the historic La Foir’Fouille and Gifi. In 2015, the brand only had around sixty establishments in France. At the start of the year, it celebrated its 800th opening, in Aulnay-sous-Bois. To the point that France quickly became, by far, its largest market, ahead of the Netherlands. The details by country are not disclosed, but in 2023, the company generated a turnover of 11.3 billion euros overall, up 27.8% compared to 2022. Better yet, For two years, it has held first place in the ranking of the French’s favorite brands, ahead of Decathlon and Leroy Merlin. “They have succeeded in creating a brand image. In the early days, we didn’t take too much responsibility to go to Action. It is now becoming a standard: as consumers are proud, they want to make it known”, analyzes Noria Cung.
6,000 references divided into 14 categories
And the brand doesn’t intend to stop there. After being slowed down by Covid, Action has regained its cruising speed of new inaugurations. “We have a map of ‘white zones’ where we are not yet established, but this is starting to seriously diminish,” laughs Wouter de Backer, the Belgian general director of Action in France. Recently, the group launched its fifth distribution center near Marseille, with the ambition to increase the number of openings in this area. “We need to be able to grow quite quickly because we’re opening a lot of stores. And of course, you can’t open new ones if there isn’t a distribution center nearby,” points out Jens Burgers, the supply chain director, who estimates the number of stores at 50 when a distribution center becomes efficient. Even the competitors salute the feat. “I am impressed by their growth, it’s quite extraordinary. They are developing well with only five warehouses,” confides the French manager of a Scandinavian discount brand.
Expansion must continue, affirms Wouter de Backer, but must not be to the detriment of the brand’s economic model, which can be summarized in two words: price and standardization. In store, customers will invariably find 6,000 references spread across 14 categories, ranging from stationery to DIY, including decoration and toys. On average, a product costs less than 2 euros. To continue to continually attract customers, 150 new references arrive on the shelves every week. “Customers are having fun, ending up falling for the products because they are so cheap. Action is surfing on categories where we always need something, like stationery,” describes Jean-Marc Megnin, independent retail sector analyst. A model that is reminiscent of fast fashion, including its flaws.
Heavily criticized for its propensity to encourage consumption, the low durability of its products and its environmental impact, Action’s management is defending itself. It promises to work with its suppliers, particularly on reducing the use of plastic. But is its model really compatible with the challenges of energy transition? “Everyone compares themselves to the competition. Fashion began to change because companies in the sector found themselves in difficulty. But as long as Action’s competitors are in this soft underbelly where no global strategy is implemented place on the subject, he will keep this model”, estimates Noria Cung.
Strong negotiating power
All products are currently negotiated by a purchasing center based in the Netherlands, which then orders stocks for the group’s 2,500 stores across 12 countries. “If items are too expensive, we take them off our shelves. Unlike supermarkets, we are not obliged to offer all products like milk or butter, our customers know that,” explains Nastasia Nikolic, business development manager at Action. In negotiations, the Dutch ogre has a tough tooth. “Unlike the rest of the major retailers which start from the purchase price that the suppliers offer, we operate in the opposite way: we start from the price that, in our opinion, the product is worth in store,” adds the sales representative.
Six times a week on average, each store in Europe receives a delivery made by a double-deck truck which allows it to transport 60% more products than a conventional trailer. An additional way to keep costs as low as possible. At Action, we still find some references to food products, at the best price, we promise from the management side, which has its own little tips. “Bottles of Coca-Cola are not found in a fridge. They may not be as cold as elsewhere, but they will be cheaper,” says Wouter de Backer.
Action works with 650 suppliers spread across Europe and Asia. To ensure these ultra-attractive prices, each new potential store location is studied extremely precisely, even if it means not being exactly in the most popular catchment area. “We have our parameters. We never open a place with the risk of having to close it in two years because it won’t do the job. It’s stupid to pay more to be in zone A [NDLR : la plus fréquentée]while a little further away customers still come to us,” maintains Wouter de Backer.
In the past, however, the company has not refrained from moving a store 200 meters further away, such as in Beauvais, to save space and improve customer comfort. “The bet paid off,” says the general director. In Drancy and Bobigny, two stores located just 500 meters apart even appear in the top 50 establishments generating the most turnover for Action in France. Despite the difficulties linked to land, Action has no difficulty finding new places to continue its phenomenal development. “Being the favorite brand of the French for the second year in a row makes an impression and it opens doors for us,” he adds. In Paris, the expansion model is different. The brand’s third store recently opened in the 15th arrondissement. Prices there are slightly higher than elsewhere in France and you must nevertheless be able to ensure a substantial turnover for it to be profitable.
Clermont-Ferrand, Brussels, Nuremberg, Rome, Prague… No matter the country or region, each store is arranged in the same way. “The customer will always find their way. I have worked for other distributors, each time we had to discuss the organization at the back of the store, it takes time,” says Wouter de Backer. Inside, the aisles resemble a classic supermarket. Action has nevertheless chosen sobriety: gray and blue dominate, while the large promotional posters that Lidl and other Leclercs love have been left in the closet. Another singularity, the absence of music on the shelves… to avoid paying royalties to Sacem.
A tight-knit organization
To best satisfy customers, the brand prefers to focus on a tight organization. “She puts the resources into it. You rarely queue a lot at Action. As soon as there is a bit of a wait, we open a till,” notes Noria Cung of Pixis Conseil. Every morning and every evening, after customers have passed through, the products are put back in place and new stocks fill the shelves. The pace is sustained, especially since each action is timed. What the unions denounce. “Our productivity model is based on activity planning. Yes, we measured the times for each activity, but we only used the averages,” explains Robin Roy. “We must not deceive ourselves, the employment contract is not the same as at Système U. The salespeople are also preparers, logisticians… They barely also do the cleaning in the evening,” points out Jean-Marc Megnin.
Furthermore, the turnover of 18,000 employees in France peaks at more than 50%. “I recently visited a store in the Paris region, in Bagnolet. One of the salespeople who had been there since the opening told me that 50 at the start, there are only five of the implementation team”, demonstrates Mélanie Basty-Ghuysen, CGT representative on the works council. Management assures that the turnover of the workforce is linked to the youth of the employees. But Mélanie Basty-Ghuysen also criticizes the presence of a 50 kilometer mobility clause in the contracts “In my opinion, it is activated to punish people. Many are threatened when their managers are not satisfied,” says the elected official.
However, the various trade union organizations are not unanimous on the issue. Fernando Sebadelha, national union delegate at the CFDT, the majority union at Action, recognizes that there are epiphenomena in certain stores: “It’s normal that Action is exposed. 806 stores, that’s not trivial.” For its part, management, which is not very vocal on the subject, does not deny that it still needs to improve working conditions. “We must not be naive. We must always find the right balance between customer satisfaction, employee well-being and economic parameters. It may happen that at a given moment, there is an imbalance in this triangle”, concedes Wouter de Backer. A justification which does not convince some of the elected officials.
The Action effect
In the meantime, Action is consolidating its model and stepping on the heels of many brands. “I think we’re a competitor to everyone!” believes Wouter de Backer. Surprisingly, this success was rather well received in the distribution sector. “The arrival of Action on the French market has put the spotlight back on brands that offer low prices. It also reminded our customers that we were positioned in this segment,” assures Ivan Rapoport, director of La Foir’fouille. Above all, when Action sets up next to another brand, the latter’s turnover tends to explode.
In Sainte-Geneviève-des-Bois, in Essonne, Action opened its largest establishment in France in 2020 next to a La Foir’Fouille store. “Honestly, we have never made so many figures,” admits Ivan Rapoport. Same case for the low-cost decoration and furniture specialist Centrakor. “When we are next to each other, it attracts people, especially since our offers are complementary,” concedes its CEO, Olivier Rondolotto. “We have done analyzes of the turnover of our stores, when an Action opens near us, it almost immediately has a positive effect,” confirms Rémy Adrion, founder of the Noz clearance chain. Being acclaimed even by your competitors, another great feat.
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