Auchan Holding SWOT and PESTLE Analysis

Strength

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Weakness

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Opportunity

1. Taking advantage of market leaders in other countries: Different markets act & behave differently and Auchan acknowledges it well. Following the difficult scenario of Auchan’s operations in the market of Italy, it sold its Italian subsidiary to Conad in May 2019. Conad is the Italian cooperative retail group and undertakes the sales and operations of Auchan Retail Italia. Auchan Retail Italia, in Italy, operates under the name of Auchan and Simply brands and has 1600 stores, under franchise or fully-owned, under the categories of digital stores, supermarkets, ultra-convenience, and hypermarkets. This deal brings an opportunity for Auchan Italia to join an Italian Actor, Conad and learn through its expertise as a market leader in the Italian market and gain momentum for its own operations. The acquisition also took care that it does not adversely impact its other operations in the Italian market. Following which, the deal will not be applicable to the 33 non-franchised supermarkets or drugstores. Also, the Auchan and Simply Stores in Italy, currently operated by Ceetrus will continue to be operated as such. This deal presents an example and an opportunity for Auchan to collaborate with such market leaders in other countries as well as it will be a direct boost to its growth and a chance to learn the different geographies well. It will also enable Auchan to make its business profitable where it is currently going in losses or very low profits.

2. Implementation of “Renaissance” action plan: To better the overall financial performance, an action plan is formulated by Auchan by the name of “Renaissance”. The plan contains strict financial objectives for all the 3 Auchan Holding businesses, that are Auchan Retail, Oney and Ceetrus Real Estate Services. In the short term, a close examination of loss centers will be done and investments will be done after identifying the priority points. In the midterm, Auchan aims to work on its core competency of being a retailer which build innovative ecosystems with its partners and works in the interests of local areas. To do this, Auchan aims to observe the people and their stakeholders in their "living zones". Meanwhile, Ceetrus will focus on optimizing returns from its existing asset base and successful completion of projects which are already in action. Meanwhile, Oney will be looking forward to broadening its range of solutions that meet the need of the hour. Thus, the "Renaissance" plan, if implemented successfully, will not only help Auchan to sail through the difficult times but also to convert loss-making centers into profit-making centers in the near future.

3. A long-term alliance between Auchan Holding and BPCE: In April 2019, Auchan Holding and BPCE have signed a long-term partnership agreement in which BPCE has acquired 50.1% interest in Oney Bank. Groupe BPCE is the 4th largest banking group in Eurozone and 2nd largest in France and by leveraging its expertise in specialized financial services and payments, it further looks forward to expanding in the retail banking market in Europe. Oney Bank plans to strengthen and expand its status as a European leader in insurance, payment solutions, digital profiling and financing through the alliance and the joint expertise of Auchan Holding and BPCE. The alliance will not only enable Oney to further expand and accelerate the transformation in the field of digital and human capital but also work towards the development of its staff, serve the business of its partners and the projects of its clients. In the first phase of the alliance, Group BPCE will provide Oney the access to its expertise in the area of payment solutions for merchants which includes payment services with access to the multi-channel platform developed by S’Money, Payplug, and Natixis Paiements. Oney will also benefit from BPCE’s strength and experience in payment card issuance.

4. Implementation of product partnerships: Auchan has been long known for its food retailing since its inception. With time, Auchan has also expanded its operations to specialized non-food retailers. And now, Auchan has taken one step more to further expand its presence in the non-food retailing sector. Auchan has chosen 5 categories particularly to expand its operations in the non-food retailing area. These areas include Home Appliances, Textiles, Automotive equipment, cultural products, sports. These areas have been strategically chosen to keep in mind its own expertise and the growing market trend in these areas. The 5 categories selected are planned to pilot the system in France in the second half of 2019. The plan will then be expanded and the model will be applied to different markets based on the success and the response here in the initial phase. With changing market needs, demands and expectations, this step by Auchan is a great opportunity for it to bring a new flavor in its offerings. Also, this step will help Auchan to expand its ever-increasing customer base even further.

Threat

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Political

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Economic

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Social

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Technological

1. Implementation of Blockchain Technology internationally for Food Traceability: Implementing Blockchain technology for tracing food products along its supply chains is one of its kind initiatives by Auchan Retail towards campaigning for safe, healthy, local and good food. The technology is used by the various stakeholders associated with various stages of a product's life; from the moment a seed enters the supply chain to the moment it reaches a customer's plate. Each and every relevant product information is recorded on a single platform by each distributor, producer, logistics operator and processor which then can be accessed by a customer by scanning a QR code printed as a product label once the product reaches the store. The entire product related information is now visible to the consumer like the product's origin, its journey details, etc. The customer, accessing the information this way is ensured that the product available is of the highest quality. To access the same, three interfaces have been launched- first being the inventory management tool for the local competent authorities to check the authentication of certificates issued by firms, second is a B2B application for the operators in the supply chain to provide a product traceability data, third is a B2C application for consumers to access all the information regarding the product from its source to the point it is available in the store. Currently, blockchain technology is being implemented by Auchan to track its organic carrots only. In the next few months, customers will be able to gather similar information on potatoes and then poulet will be able to get traced by the French people. In further phases, Italians will be able to track tomatoes, Spaniards will be able to track local fruits and Iberian pork.

2. Introduction of register-free stores in Europe: Register-free store or "Minute" store is a "container store" in which shopping is done entirely through a smartphone. These stores are mini-supermarkets which are the size of a container, have no staff or registers and are accessible 24/7. Once a customer enters, he is identified through his/her account made prior to his/her entry. The customer, then, may choose the products and check out by scanning the bar code at a self-scan-post post which the payment is made through the phone application. The stock is updated automatically so that the supplies are refilled regularly from the nearest hypermarket. The SKUs are optimized accordingly. These stores are now 750 in number in China in major cities. These work as neighborhood stores put in place with an intention to meet the expectation of local customers within 5km of their residence. With changing customer expectations and preferences, these stores will prove not only a cost-effective mechanism of operation but also provide convenience to customers with increasing accessibility to the internet.

Legal

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Environmental

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