Supermarkets in France

2020 IMPACT

Supermarkets thrives amidst the chaos of COVID-19 due to a combination of factors

Supermarkets registered positive sales growth during 2020 as it became one of the few retail channels in France to benefit from the COVID-19 crisis. In an echo of the favourable situation unfolded in convenience stores, supermarkets benefited from the proximity of many of the stores in the channel to the homes of consumers as well as the more human scale of the outlets, which meant that consumers were more willing to shop in supermarkets than for instance hypermarkets and warehouse clubs.

Relatively high prices the only fly in supermarkets’ anti-COVID 19 ointment

As mentioned above, the strong growth recorded in supermarkets during 2020 was the result of the channel conforming to many of the consumer trends that emerged from the COVID-19 virus. However, one factor which did work against channel during the year was the slightly higher price positioning that many supermarkets have, especially in comparison with discounters.

ITM Entreprises SA (Intermarché) extends its lead over its rivals

ITM Entreprises SA extended its leading position in supermarkets during 2020 as the retailer lived up to the reputation of the three musketeers, the legendary 17th century French literary characters that feature in the logo of the retailer’s Intermarché supermarkets. Moreover, the spirit of the three musketeers is evoked in the solidarity that exists between ITM Entreprises and the owners of the hundreds of franchise-type outlets that comprise its store network.

RECOVERY AND OPPORTUNITIES

A positive outlook for supermarkets, although slower growth rates are set to be seen

Supermarkets is slated for positive growth over the forecast period, although growth rates are expected to be slower than what was seen during the review period. The country’s leading chains of supermarkets are expected to continue benefiting from their proximity to the homes of consumers and the increasing focus on e-commerce and click-and-collect among channels leading players.

Shift towards smaller outlets set to be a major trend in supermarkets

Among the most important trends in supermarkets in France during the forecast period is expected to be the shift towards smaller outlets located in proximity to the homes and workplaces of consumers, as well as compact outlets located in convenient areas with high levels of consumer foot traffic. This stronger focus on smaller outlets in closer proximity to residential neighbourhoods can be seen as a reaction to the increasing numbers of affluent urban consumers living in single and dual-occupancy households, as well as the ageing of the French population.

Outlet rationalisation programmes likely to be accompanied by a focus on technology

While supermarkets had a good year during 2020 and although the channel is expected to register a positive performance during the forecast period, the spoils of this positive situation are not expected to be shared evenly among the categories leading players. For instance, Casino Guichard-Perrachon and Auchan are expected to continue struggling and this is expected to see them continue to review the status of underperforming stores, resulting in reductions in the numbers of outlets operated under the Auchan, Monoprix, Franprix and Casino banners.