Hardly friendly
For all their qualities, in this market analysis we show the French grocers are hardly fraternal. Whilst regional, it is a franchised, locally priced, competitive, low margin French grocery industry.
Tell me something new…Carrefour is regionally #1 as well as nationally…
We’re not unlocking any ‘trade secrets’ with the above summary. What we do show in our detailed regional analysis – courtesy of store-level Nielsen data – is that Carrefour is the clear #1 operator, on average, by region, not just at a national scale. That results in scale where it matters. Carrefour may have its faults but, structurally, it should be competitively advantaged.
…Pricing is more nuanced than the national data suggest
Carrefour may be numerically the biggest, but Leclerc is the best…in brand and price perception, and in reality. However, that price advantage is somewhat distorted. We show pricing is heavily influenced by wealth, or rather the regional costs relating thereto. Leclerc’s geographic exposure to less affluent regions helps its pricing, though isn’t the defining factor in its success.
…Casino’s Parisian jewel looks secure for now
With the bulk of Casino’s profit coming from the Ile de France, focus understandably is on on-line’s advance and Carrefour’s acquisition of DIA. Whilst some impact is expected, we show that <25% of Casino’s Franprix stores likely will be impacted by Carrefour’s DIA conversions.
A picture paints a thousand words…buying groups have a geographic logic
Given its regional nature there’s a surprising degree of overlap for most operators. That said, the buying group of 2014 made a degree of geographic sense, most notably Auchan and Systeme U.
Leclerc and Carrefour should win-out
With further consolidation (beyond the buying collaborations) unlikely, we think the French market will remain highly competitive, but with structural reasons for Leclerc and Carrefour to win-out.