Auchan is cutting back on its margins to contain inflation

Auchan sacrifices its profitability to remain competitive. Struggling in France, the distributor has “assumedon Tuesday a significant drop in its short-term profitability to contain the rise in its prices and support its sales. Its Ebitda globally contracted by 121 million euros (21.5%) in the first half, and even by 74% in France, under the effect of these investments and the increase in its costs – wages and energy.

“In order to support our customers, we pass on inflation slowly and gradually», explains Ludovic Delcloy, financial director of Auchan Retail. The distributor has managed to contain the rise in its prices to 4%, he says, against 6.7% for the entire market, according to INSEE. In order to further reduce the bill for its customers, Auchan promotes its own brand and its entry-level products, which are less expensive than national brand products. The development of these private label products is one of the priorities of the director of Auchan…