Auchan already has as many hypermarkets in China as in France
Auchan, food distribution chain known in Spain as Alcampo, already has 300 hypermarkets in China, as many as in France. The spectacular progress of the Chinese middle class in the last few years arouses the interest of multinational companies that see the solution to the economic crisis of our punished continent in the East. This market has also been the French distribution group’s objective for more than fifteen years.
However, despite the good results in China and Russia - where, by the end of 2013, the group will have opened another 50 hypermarkets - this year Auchan recorded a net profit fall of 30.3% over the previous year, some 237 million Euro. France is the only country in the Euro zone where there profits have grown, by 3%.
Xavier de Mézerac, the group’s Chief Finance Officer, said at the presentation of the company's annual results, they had to be cautious regarding emerging countries and drew attention to the fact that, even though they’re still growing, the slowdown of the Chinese economy, growing at a lower rate than expected, has its effects on the business performance of Auchan in China.
With respect to Western Europe, Auchan’s CFO said the turnover in the Eurozone will be stagnant and will even shrink in some countries. Spain, which until recently represented the second volume of sales and profits for Auchan after France, is among the European countries most affected by the crisis and will be one of the regions where sales will drop; they might even decrease more than expected especially because of the VAT’s increase from 18% to 21%.
Auchan’s situation in France, where it’s the leader in the distribution in supermarkets, is - according to its executives - very hopeful despite the tax changes and the slowdown in household consumption. The latest fiscal reforms by the Government of François Hollande mean Auchan will pay 22.4 million Euro more to the French Treasury than in 2011, a year in which the French distributor paid the country’s Treasury 250,2 million Euro. However, company officials announced that despite the group’s difficulties and even when they must carry out an internal cost-cutting program there wouldn’t be any layoffs.
Source: Dirigentes digital
