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(AOF) – In line with the commitments made during the General Food Congress, Auchan Retail, Casino and Schiever announce the implementation of common sectors with the agricultural world. The first specific supply chain will focus on private label outdoor eggs from the three companies. Horizon, a "new generation" purchasing center operated by Auchan Retail, Casino Group, Dia, Metro and Schiever, thus fulfills its commitments made when it was launched in July 2018.
It will be eggs of French origin, produced in farms in which the hens live in the open air, are fed with cereals 100% of French origin and without GMO and do not receive any antibiotic treatment.
In addition, the packaging in which these eggs will be marketed is made from recycled materials, is recyclable and biodegradable and is designed and manufactured in France.
Consumers will find eggs in stores under the retail brands of Auchan Retail, Casino and Schiever from April 2019.
In the case of the outdoor egg sector, Auchan Retail, Casino Group and Schiever have committed themselves with the actors in the sector for a period of at least 3 years and guaranteed minimum volumes.
In terms of pricing, this approach is based on a trust pact integrating all stakeholders in the sector: farmers, feed suppliers for hens, industrial and distributors.
It provides for a six-monthly price review mechanism, a mechanism for all stakeholders, and for fair and balanced remuneration for each stakeholder in the chain.
The transparency of this pricing mechanism is perfectly in line with the spirit of the General States of Food since it will start from the producers' production costs.
AOF – LEARN MORE
Strengths of value
– One of the top fifteen worldwide distributors;
– Distributor weighing € 37.8 bn organized into 3 branches: France Retail under the Casino, Monoprix, Franprix-LeaderPrice and Vindémia brands for 50% of sales, Latin Retail in Latin America for 45% of sales with GPA food retailers , Exito, Grupo Disco Uruguay and Libertad Latin America (Brazil and Colombia) and, finally, e-commerce under the brand name CDiscount;
– Strategy, in France, development of own brands and differentiated positioning for each brand, in e-commerce, improvement of services with ecosystem specific to the marketplace, and, in Latin America, refocusing activity around the market. 'Exito to increase leadership positions;
– Dynamic management of real estate badets, worth € 3.6 billion.
Weaknesses in value
– Low market valuation of real estate badets;
– Insufficient profitability in France, competition having hardened in 2017;
– Competitive risk in Paris with the upcoming arrival of Leclerc;
– Rising debt, degraded by Standard & Poor's, and deteriorating working capital requirements at the end of 2017, which raises doubts about the group's ability to return to positive cash flow.
How to follow the value
– Flipping value;
– High sensitivity to food crises and purchasing power;
– Benefits from investments in logistics and e-commerce;
– Speculation on a sale of Monoprix or the Brazilian subsidiary Viavarejo to Amazon;
– Continued sales growth recorded in the first quarter;
– 2018 targets: increase in current operating income of more than 10%, and free cash flow coverage, expected at € 1 billion, of financial expenses and dividend service;
– Locked capital, holding company Rallye holding 50% of the capital and 61.3% of the voting rights.
Generalist distribution
Faced with the strategic turning point of the incursion of e-commerce in the food industry, retail players must reinvent themselves. Some are forming partnerships like Alibaba and Auchan in China. Defensive strategies are also pursued and various plans are presented: "Vision 2025" at Auchan, logistics transformations at Intermarché, "Carrefour 2022". These restructurings sometimes involve job losses or savings. Thus 2 billion euros of savings by 2022 are anticipated at Carrefour. The question of the future of the supermarket is more than ever crucial. Carrefour and Casino have already planned to reduce their surfaces while the formula of "Drive", continues its development. According to the Fevad more than 4,000 already exist in the territory.
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