Intermarché Considers Closures of Casino Stores Amidst Financial Struggles
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Financial Imbalance Forces Challenging Decisions
Intermarché, the third-largest distributor in France, is contemplating the closure of 30 stores acquired from Casino, impacting approximately 680 employees. Despite efforts too revitalize these locations, financial viability remains elusive, prompting the company to initiate discussions with staff representatives regarding potential closures.
Inherited Challenges: A Legacy of Underinvestment and High Costs
According to a press release, Intermarché attributes the financial difficulties to a combination of factors inherited from Casino. These include notable underinvestment in recent years, elevated operating costs that are disproportionate to market realities, and a trade policy that failed to retain customers, driving them to competing brands. Moreover, despite negotiations, rental costs for some locations remain unsustainably high.
Any commercial exploitation is to date impractical for 30 stores bringing together nearly 680 employees… financial balance remains unattainable for a limited number of stores, despite the full mobilization of the group for months.
Store Locations at Risk
The stores potentially facing closure are spread across France, including locations in Millau, Decazeville, Les Pennes-Mirabeau, Lucé, Plonéour-Lanvern, Pont-Saint-Esprit, Auzeville-Tolosane, Blagnac, Cenon, Le Rheu, La Riche, Châlette-sur-Loing, Fumel, Dombasle-sur-Morthe, metz, Bagnoles de l’Orne, Idron, Perpignan, Saint Louis, Meaux, Saint-Mard, Ozoir-la-Ferrière, Niort, Pompaire, Épinal, Fresnes, and Le Thillay.Additionally,two stores in Lyon (Place Gabriel Péri) and Boissy-Saint-Léger are already closed.
Support for Affected Employees
Intermarché has pledged to provide thorough support to affected employees, including individual assistance and consideration for job opportunities within the broader group. the company emphasizes its commitment to responsible management of the situation and aims to mitigate the impact on its workforce.
Strategic Context: Intermarché’s Expansion and Market Dynamics
Intermarché’s acquisition of 294 Casino stores in October 2023 represented a significant expansion, projected to add €3 billion to its annual turnover. As of mid-March, 211 of the acquired stores had been rebranded as Intermarché, while 62 operate under its discount banner. The remaining stores are slated for sale, as mandated by the Competition Authority.
This acquisition occurred amidst Casino’s financial difficulties, highlighting the competitive pressures within the French retail landscape. The challenges faced by Intermarché in turning around these underperforming stores underscore the complexities of integrating acquired businesses and adapting to evolving consumer preferences. According to recent market analysis, the French grocery retail sector is increasingly competitive, with discounters and online retailers gaining market share, putting pressure on conventional supermarket chains to innovate and optimize their operations.
The situation follows earlier announcements of social plans within Casino,potentially affecting approximately 2,200 employees,further illustrating the ongoing restructuring within the sector.