French retail giant Auchan is undergoing significant changes to its operations in France, including the closure and sale of several supermarkets. This move is part of a broader strategy to streamline its business and shift towards franchising. The company is looking to divest from certain locations, marking a departure from its traditional model of owning all its stores.
As of late 2023, Auchan has sold seven supermarkets, with locations in Montdidier, Ferrières-en-Bray, Saverne, and other towns. These stores will transition to franchise ownership, with the company exploring similar deals for other locations in the future. This move signals a strategic pivot, as Auchan looks to rely more heavily on franchising, potentially converting up to half of its 235 supermarkets in France into franchise-operated stores
.A Major Shift in Business Strategy
This decision represents a significant change for Auchan, which has traditionally owned and operated its stores directly. The shift toward franchising is seen as a way to reduce operational costs and enable the retailer to focus more on its core strengths, such as supply chain management and marketing, while leaving day-to-day store management to franchisees.
While Auchan sees this as a way to boost profitability and expand its presence with less direct investment, the move has sparked concerns among unions about the potential social impacts. The shift may lead to workforce reductions and a change in working conditions for employees at the affected stores
Looking Ahead: Franchising as the Future
With plans to franchise up to half of its French supermarkets, Auchan is embracing a model that has seen success for other major retailers. This move could allow the retailer to remain competitive in an evolving market, while also potentially improving its profitability by leveraging the entrepreneurial efforts of franchise owners.
Despite the benefits, the change raises questions about the long-term impact on Auchan’s workforce and how these changes might affect its relationship with customers. As Auchan proceeds with its strategy, further store closures or transitions to franchised operations may follow.
For more details, read about Auchan’s evolving strategy and the impact of franchising in this major restructuring move