The fall in third-quarter sales at Groupe Casino’s smaller-format stores in France is a “shock” that will give the French retail giant cause for concern, a retail analyst told just-food today (15 October).
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Casino posted a 3.2% fall in organic sales in France during the three months to the end of September.
In the struggling hypermarket format, Casino saw sales at its Géant Casino banner fall 6.3%.
However, according to Verdict Research analyst Simon Chin, declining sales at the company’s convenience formats – Monoprix, Casino Supermarkets and Franprix- may have come as a greater blow to the company.
“I was very shocked by the results, especially in the convenience formats, which were previously doing quite well. Monoprix, Casino Supermarkets and Franprix were all in negative territory,” Chin observed.
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By GlobalDataCasono said that its Franprix’s same-store sales were “almost stable”, down 0.7% in the quarter. This “solid performance”, combined with faster expansion at both Franprix and Leader Price, enabled the two banners to post a combined negative organic growth of 0.6%, the company said.
However, according to Chin, Casino must further increase its focus on price in the convenience channel if it is to win back momentum.
“These smaller formats could now be loosing out to cheaper competitors,” he suggested. “Price is still a big issue in France. With continued rising unemployment, consumers are becoming increasingly cautious.”
While Casino is following a policy of “targeted price cuts” in its hypermarket business and investing in price elsewhere, the retailer may need to step up these efforts and look to increasing its private label offering if domestic sales are to improve, Chin added.
