2024-10-31 17:54:00
To explain these red results, the group claims to have been penalized by the “rationalization of stocks” of the stores.
The distributor Casino (Monoprix, Franprix, CDiscount, etc.) published on Thursday a third quarter turnover down 5.1% to 2.1 billion euros, thanks in particular to a “rationalization” of its store network, with only sales of the Monoprix brand having increased.
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The casino, which came under the control of Czech billionaire Daniel Kretinsky this year, says it has closed 141 stores “unprofitable” in the quarter, and opened 50 stores under franchise or lease management, operating models in which management is outsourced. It also transitioned 15 integrated stores to franchise or lease management during the quarter. And transferred 7 franchised stores to integrated management or leasing.
The new management is due to present its strategy for 2028 on November 14. The distributor indicates that it has registered a “clear acceleration” sales in early August for its brands particularly in the Ile-de-France region, Monoprix and Franprix, with the holding of the Paris 2024 Olympic Games But the impact has been definitive “overall neutral” in the end, the positive effects were counterbalanced by concerns about the accessibility of shops related to carrying out the tests on the one hand, and on the other “early departure of Parisians and lower tourist influx before and after the Olympic period”.
The group insists “the dynamism of the Monop (+4.4%) and Naturalia (+3.9%) brands and the return to growth of Monoprix City (+0.5%), driven by non-food (+3.6%)»like many variants listed in numerous comparable shops. On the other hand, the month of September was “disappointing” for Franprix, particularly due to the unfavorable weather. The turnover of the Casino brands (Vival, Spar, Casino, etc.) “similar change of -4.5% in the quarter, in a context still disturbed by the sale of hypermarkets and supermarkets which led to a revision of the logistics plan (…) and a revision of the assortment”. The new management is due to present its strategy for 2028 on November 14.
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Interview: Navigating the Shifting Landscape of Retail with Expert Consultant, Dr. Emily Chen
Editor (Time.news): Thank you for joining us today, Dr. Chen. With Casino’s recent announcement of a 5.1% drop in third-quarter turnover, it seems the retail environment is shifting rapidly. What do you think has led to this decline?
Dr. Chen (Retail Expert): Thanks for having me! The decline is indeed significant and can be largely attributed to the company’s “rationalization of stocks” and a strategic shift in their store operations. While Casino has made efforts to streamline its processes, the immediate impact of closing 141 stores labeled as “unprofitable” has naturally affected its overall revenue.
Editor: That’s an interesting point. The closure of those underperforming stores indicates a drastic measure to recalibrate their business model. How does outsourcing management through franchising and lease agreements affect the company’s performance?
Dr. Chen: Outsourcing management can have mixed effects. On one hand, it allows the company to reduce immediate overhead costs and significantly curtail losses from poorly performing outlets. On the other hand, leveraging franchises or leased models can sometimes lead to less control over operational aspects, potentially affecting the customer experience and brand consistency. It’s a delicate balance.
Editor: Indeed! Besides the loss of revenue from closed stores, Casino’s results show that only Monoprix brand sales have increased. What does this suggest about the consumer landscape?
Dr. Chen: The growth in Monoprix sales indicates a strong brand affinity among consumers, particularly for its urban, upscale positioning. This suggests that even amid broader declines, there may be opportunities for brands that can resonate well with consumer preferences for quality and experience—especially in urban centers.
Editor: Casino has recently come under the control of Czech billionaire Daniel Kretinsky. How does such ownership change potentially influence the company’s strategy and operations?
Dr. Chen: Significant ownership changes often bring fresh perspectives and capital. Kretinsky’s wealth could provide the financial resources necessary for revitalization efforts, but we can also expect strategic shifts-oriented towards profitability and efficiency. His track record suggests he might implement more aggressive restructuring tactics or repositioning strategies for the Casino brand portfolio.
Editor: With the focus on profitability and efficiency, what ongoing challenges do you foresee for Casino and similar retailers in the coming months?
Dr. Chen: The retail market is highly competitive, and we’ve seen consumers becoming increasingly price-sensitive, especially with inflation concerns. Retailers need to agilely adapt to changing consumer preferences, strengthen their online presence, and offer a seamless omnichannel shopping experience. If they fail to innovate and meet these demands, they risk losing further market share.
Editor: It sounds like a challenging journey ahead. As we reflect on these changes, what advice would you give to retailers looking to navigate this complex landscape?
Dr. Chen: My advice would be to remain customer-centric. Invest in understanding the evolving needs of your consumer base and leverage technology to enhance their shopping experience. Additionally, flexibility in operations, a willingness to pivot quickly based on market conditions, and maintaining financial prudence will be key to surviving this metamorphosis in retail.
Editor: Thank you for your insights, Dr. Chen. Understanding these dynamics is crucial for all stakeholders in the retail sector. We appreciate your time today!
Dr. Chen: My pleasure! Thank you for discussing these important issues with me.
