E-commerce and the increase in the average customer basket have made up for the drop in hypermarket traffic during the lockdown. Savings measures have continued. Auchan, the Northern France group, is back in the green.

Edgard Bonte says he is “very satisfied”. Despite the lockdown, which led to a 30% to 40% drop in the number of visitors to its hypermarkets, the chairman of Auchan Retail announced Friday, August 28th, a significant increase in earnings. The gross operating surplus of the Northern France group’s shops increased by 15% in the first half of the year to 1.24 billion euros. The margin rate is 5.6%. “We are confirming our target of 6% in 2022,” says the manager.

Ceetrus loses rental income

The improvement in results is even more clear at the level of Auchan Holding, which oversees the hypermarkets and supermarkets that Auchan operates in 12 countries and the shopping malls of its Ceetrus property. Because of the closure of venues caused by the Covid-19 (partial closure in France, with the malls remaining open to provide access to the food shops they house), the formerly Immochan lost 40% of its rental income and 86 million in gross operating profit. Despite this, Auchan Holding reported a positive net profit of 106 million.

Last year, Auchan had included in its half-year accounts the cost of the disposal of its subsidiary in Italy, i.e. approximately 1.5 billion euros. This critical moment has passed. Excluding the various exceptional factors in the first six months of 2019 and 2020, the so-called “normalized” net income of Auchan Holding, an entity controlled by the Mulliez family association, rose from 72 to 300 million euros.

Despite the recurring difficulties of the Russian market and the depreciation of the rouble, notwithstanding the drop in petrol sales because of confinement, Auchan shops’ turnover only lost 1.8% in the first half of the year, to 22.2 billion euros. France even grew slightly by 0.8% to 8 billion euros.

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E-commerce boom for Auchan

“Two things have balanced out the drop in the number of shoppers in our French hypermarkets,” explains Edgard Bonte. “Firstly, when traffic fell by 30% to 40% at the beginning of the confinement, the average basket climbed by 80%. There were fewer customers, but they bought much more. Then it took us a few days to adjust, but our online sales exploded.”

At the company level, e-commerce sales (drive-through plus delivery) accounted for around 7% of the pre-crisis total. The digital ratio has risen to 11%.

But the improvement in Auchan’s results is also for the continuation of a savings plan. In January, the group launched its first voluntary redundancy plan for 677 head office employees. They made 184 million in savings in the first six months of the year. This brings the total since the launch of the “Renaissance” plan to €423 million. The target is 1.1 billion in 2022.

Ceetrus saw its gross operating surplus fall by 40%, but it remains positive at 115 million. The property sector has reduced its investments by a third. Another cautious move: to maintain market confidence, Auchan Holding reduced its debt by two billion.

In the end, Auchan went through the crisis with fewer difficulties than some observers feared.