“A desolation”, for the CFDT. “A project of historic importance”, for Force Ouvrière. Convened this Tuesday morning near Lille (North) for an extraordinary central social and economic committee, the unions of the Auchan distributor were presented with a draft social plan which concerns almost 2,400 positions (2,389 to be precise). We recall that in 2020, during the last wind gap experienced by this family group in the Mulliez galaxy (Decathlon, Leroy Merlin, Kiabi), a voluntary departure plan for more than 500 positions in January was followed, in September, by the elimination of nearly 1,500 positions. “We have never been told so many job cuts”, underlines Christophe Delay, national delegate of the FO, for whom “it is unacceptable that the 53,000 employees are once again paying the price for poor strategic choices by the management” .
The new strongman of the brand, Guillaume Darrasse, has returned to the details of this plan. At headquarters, the pooling of support functions between Auchan France and Auchan International will impact 784 positions (out of approximately 4,000). The reorganization in the stores will affect 915 jobs: especially the salespeople who advised customers in the TV or Hi-Fi departments will disappear, transforming into self-service areas.
“There will still be a social plan”
Judged by the management to be too important “sources of loss”, the hypermarkets of Clermont-Ferrand Nord (Puy-de-Dôme), Bar-le-Duc (Meuse) and Woippy (Moselle) will close the curtain, as will the Aurillac supermarket ( Cantal) and six minimarkets (466 spaces). The three warehouses that handled Auchan Direct orders will also be closed, with home delivery transferred to drive-thru. “Even if the management announces support measures and voluntary resignations, in the end there will still be a social plan”, complains Gilles Martin, union representative of the CFDT group.
Having arrived last April, Guillaume Darrasse was promoted to general manager of Auchan Retail at the end of August. Since his arrival, he who, for once, is not a man from the Mulliez galaxy (he has worked mainly for Système U and Leclerc), has rocked this adrift boat that is Auchan, which went from 11.5% to 9 .1% of the market. share since 2012, i.e. 5th place in the sector, far behind E. Leclerc (24.1%), Carrefour (21.4%), Intermarché (17.4%) and Coopérative U (12.2%).
A cost hunt
The shortcomings of the ch’ti retailer have been known for some time: an overrepresentation of large hypermarkets (on average twice as large as the U or Leclerc hypermarkets), which are losing momentum. A low yield per square meter: «A little less than 8,000 euros from Auchan, compared to 8,500 euros from U and 9,500 euros from Leclerc», recalls Guillaume Darrasse who also underlines that the wage bill of Auchan Retail is twice higher than that of the competitors. In the first half of 2024, the group’s parent company, Elo, announced a loss of almost 1 billion euros. For the general manager of Auchan Retail, only the hunt for costs will be able to create room for maneuver aimed at relaunching sales.
In parallel with the employment protection plans (PSEs) announced in the various entities of the group, several large projects were therefore launched or confirmed. In addition to the purchasing alliance already formalized with Intermarché for a duration of ten years – which should allow greater influence on negotiations with producers – the reduction of the size of the hypermarkets will be started, to reach a target surface area of 8,000 m2. The first stores, completely renovated, should be operational “in spring”.
Textiles, home, household appliances… The offer will be completely redesigned, to be more in line with consumer expectations. Especially in terms of price, the change should be visible: if Auchan stores have reduced their labels by around 2% this year, this is “not enough”, judges Guillaume Darrasse, who wants to go even further. Suffice it to say that the shareholders of this family group will be called upon to finance this price recovery: a long-term commitment.
Interview Between Time.news Editor and Retail Expert
Editor: Good morning, and thank you for joining us today. We’ve just seen some significant developments regarding Auchan’s recent layoffs and restructuring plans. With nearly 2,400 positions affected, what’s your take on the current situation and the potential impact on the workforce?
Expert: Good morning. Indeed, it’s a deeply concerning situation for the employees and the unions. The sheer number of layoffs—2,389 positions—signals a crisis not just for Auchan but also for the broader retail sector, which has faced significant challenges. Unions are understandably outraged, suggesting that employees should not bear the brunt of management’s strategic failures. This sentiment reflects a consistent theme seen across industries when companies downsize due to poor decision-making.
Editor: You mentioned the unions. They seem to have very polarized views on this plan. The CFDT referred to it as “a desolation,” while Force Ouvrière labeled it as “a project of historic importance.” Why such differing perspectives?
Expert: That disparity in perception often stems from the unions’ differing priorities and strategies. CFDT is focused on defending workers’ rights and preserving as many jobs as possible. They view this plan as catastrophic, reflecting systemic issues within the company. On the other hand, Force Ouvrière might see this restructuring as a necessary evil to ensure that Auchan remains competitive in a challenging market. Their description of it as historically important could signify an acknowledgment of the critical changes needed for the company’s survival, despite the painful consequences.
Editor: Speaking of competitiveness, Auchan seems to be struggling in the market, dropping to 9.1% market share, well behind competitors like E. Leclerc and Carrefour. What do these layoffs and restructuring efforts tell us about Auchan’s long-term strategy?
Expert: These drastic measures indicate that Auchan is in a cost-reduction phase focused on streamlining operations to regain market competitiveness. The closing of underperforming stores, particularly in areas with “sources of loss,” suggests a strategic pivot toward reducing overhead and focusing on more profitable segments. The leadership under Guillaume Darrasse, who isn’t from the traditional Mulliez group but brings fresh perspectives, might be attempting to reshape the company’s identity to better compete with more agile rivals.
Editor: There’s also the significant shift towards self-service areas and the closure of several stores. How might these changes affect the customer experience?
Expert: Transitioning to self-service can be a double-edged sword. On the one hand, it can reduce operational costs and make the shopping experience faster for customers who prefer it. On the other hand, a reduction in staff, especially in specialized departments like electronics, could lead to a decline in customer service quality. Shoppers may miss the personalized assistance they’ve come to expect, which could potentially drive them to competitors who offer a more engaging shopping experience.
Editor: It sounds like Auchan’s future is very much in the balance. With all these changes, do you believe that there’s a clear path forward for them?
Expert: It’s difficult to predict with certainty. The path forward will largely depend on how well Auchan executes this restructuring and whether it can regain consumer trust while improving efficiency. Cutting costs is only one side of the battle; they need to ensure that they’re innovating and meeting customer needs in ways that resonate. If they can strike the right balance, there’s hope for them to stabilize and potentially reclaim their market share. However, the impending social implications of this restructuring will likely continue to generate significant attention and scrutiny.
Editor: Thank you for your insights. It’s clear that the situation at Auchan is one to watch closely, both from a labor and market perspective. We appreciate your time today.
Expert: Thank you for having me. It’s a critical subject that impacts not only the employees but also consumers and the retail landscape as a whole.