Auchan reports encouraging H1 results | Progresiv
Although the retailer said that costs generated by its on-going restructuring costs had hit profits, Auchan noted the positives in its first half results. It noted the establishment of the Horizon buying alliance, its expansion of its convenience format, the on-going reinvention of its customer experience and the digitisation of its operations more widely. 
After several years of falling sales, Auchan reported its revenue was stable, at 25.1 billion euros, in the first half of 2018 at constant exchange rates. At current exchange rates it said sales fell by 3.2%. In relation to Auchan Holding, which includes non-retailing activities, at constant exchange rates, revenue fell by 0.8% in France and by 2.3% in Eastern Europe. It increased by 0.3% in Western Europe (excluding France), due to ‘strong performances in Portugal and Spain’, and by 0.3% in Asia.
However, profitability was affected by its on-going investment in its operations. It said its EBITDA fell by 22.8% to 619 million euros, with the operations where it was making the largest investments or facing on-going headwinds – France, Italy and Russia – seeing the strongest falls.
The retailer noted its investment helped it to make progress on its transformation programme, under the Vision 2025 strategy. It said the investment was part of its aim to reinvent its business. To this end Auchan pointed to four key developments undertaken in H1:
Cooperation agreements in France and internationally: these alliances are all part of its aim ‘to be a major purchaser of both local and international products’. The establishment of Horizon, which Spain-based DIA recently joined, was pointed as being ‘one of the top tier international platforms for collaboration with suppliers, covering more than 40 countries in Europe, Asia and South America’
Being a multi-format phygital retailer: the expansion of the MyAuchan convenience store format was a priority in H1, accounting for 94% of the 250 store openings it undertook. It said expansion of the format in Portugal, where six stores opened, and in China, where it ended H1 with 246 Auchan Minutes stores. Auchan also said its new trial format, He Xiao Ma, which opened stores in June in Suzhou and Nantong was evidence of the growing alliance between it and Alibaba
Rolling out its one brand strategy: Auchan said it continued to rebrand stores to its global brand, with ‘almost 50% of… stores… already switched over’. It said stores that had been rebranded enjoying a rise in customer numbers and ‘revenue increasing by between 2% and 12%, depending on the country, in the six months following the brand change’. The conversion of its supermarkets in France was completed, helping it increase its market share in H1, while the number of Auchan Direct orders in Paris increased by 25% over the period
Improving the customer experience: this focused mainly on its presence in China, where its alliance with Alibaba enabled it to offer home delivery of fresh produce and consumer goods within an hour for shoppers within three kilometres of stores. The service is now available at 165 stores and 93 cities in China, with all stores set to benefit from its roll out by the end of 2018. A second alliance, this time with electrical retailer Suning is set ‘to improve the customer experience in electronic products and services in all stores by the end of September 2018'. In Russia it launched a new format, Audastore
Transforming the business through digital retailing: Auchan pointed to its alliances with Alibaba, Salesforce and Google as drivers for the acceleration of its digitisation process. (www.igd.com)
