The food distributor Auchan, which has been experiencing economic and commercial difficulties for several years, is preparing to present, on Tuesday, November 5, to the representatives of its approximately 54,000 French employees a draft social plan, which could threaten around 2,300 jobs. . The staff representatives of several entities of this group in the Mulliez galaxy were summoned on Tuesday at 9 a.m. to the CSE (social and economic committee) in the Lille region for an “update on the situation of the company and its projects”, prompting worry.
According to a source close to the matter, around 2,300 jobs could be threatened by social plans carried out at different levels of the company. Part of the jobs would be threatened in support functions within the various headquarters, another part in the stores. When contacted, Auchan management did not wish to comment.
“I know that we are in a difficult economic period, but to have figures like that…”, reacted to AFP Fabien Alliata, CFDT central services union representative. However, he remained cautious to the extent that “there is no official information” before the CSE is held on Tuesday. “We have a lot of signals that alarm us but it’s hard to go further” in the comment while waiting for official information, also declared Franck Martinaud, Retail union representative, FO. However, he observed that “if it’s that number, it’s huge.”
Activities in Russia are no longer running
On Sunday, the specialist in the mass distribution sector Olivier Dauvers estimated that “if the unions are trembling, it is because there are reasons”, in particular because “the difficulties” of Auchan in France “have been going on for years been covered by international activities. But since Russia’s invasion of Ukraine, the distributor’s very profitable Russian branch no longer plays this role. In recent days, press reports have mentioned the sale of this Russian subsidiary. Auchan Russia, which employs around 30,000 people, told AFP it would not comment on “rumors on the market”.
In France, several factors explain the difficulties of the distributor, the 5th largest player in the French market. First, its market share, at 9.1% at the last count, far behind E.Leclerc (24.1%), Carrefour (21.4%), Mousquetaires/Intermarché (17.4%) and Coopérative U (12.2%). This data is important in the balance of power with agro-industry suppliers: the greater the market share, the more inclined they are to grant better conditions of sale for the products then placed on the shelves. This is despite the fact that price is the first purchasing criterion for the vast majority of consumers. To overcome this pitfall, Auchan joined forces with its competitor Intermarché to buy together in an alliance lasting an unusually long 10 years.
Reduction of surfaces
In addition, the group is, like Carrefour, built on an integrated model. It suffers from competition from E.LeclercIntermarché and Coopérative U, groupings of independent companies which limit support functions as much as possible and where social conditions are generally lower. This allows these stores to generally be more competitive in on-shelf sales prices. The new general director of the Auchan group, Guillaume Darrasse, comes from this world of independents. He was previously Deputy Managing Director at U.
Another weak point: Auchan, which bought around a hundred stores from its struggling competitor Casino, is historically strong in the hypermarket format, the largest stores, which are less popular today. The distributor hopes to reduce the commercial space of a certain number of them, wishing to offer other brands the opportunity to set up on the vacant space. The group had already announced in September 2020 the elimination of 1,475 positions in France, after a voluntary departure plan of more than 500 positions in January 2020.