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'Yellow Vests' protests in France prove costly for retailer Auchan

'Yellow Vests' protests in France prove costly for retailer Auchan
FILE PHOTO: The logo of French retailer Auchan is pictured on a shopping centre in La Defense at Courbevoie near Paris, France, May 16, 2018. REUTERS/Charles Platiau/File Photo   -   Copyright  Charles Platiau(Reuters)
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By Dominique Vidalon

PARIS (Reuters) – French supermarket group Auchan’s 2018 profits suffered a blow from the country’s anti-government “Yellow Vests” protests, costing the retailer 140 million euros ($157 million) in lost revenue.

Auchan also faces fierce price pressure in its home market from the likes of Carrefour and Leclerc as well as competition from Amazon. A tough market hit its results in Italy too and in Asia where its Sun Art Retail subsidiary faces online competition.

Earnings before interest, tax, depreciation and amortisation (EBITDA) at Auchan Retail slumped 20.5 percent to 1.518 billion euros (1.3 billion pounds) in 2018 at current exchange rates.

Total revenue at Auchan Retail was 50.3 billion euros, representing a 3.3 percent decrease at current exchange rates.

Revenue in France alone fell 1.3 percent, with the “Yellow Vests” protests knocking 140 million euros off revenue and 35 million euros off EBITDA.

The months-long protests forced many shops to shut down on Saturday in central Paris, as the capital suffered its worst rioting and vandalism in decades.

Auchan Retail is part of the unlisted Auchan Holding company, which also includes the Ceetrus property business and the Oney banking business.

Auchan Holding posted a 2018 net loss of 997 million euros following a 1.1 billion euros impairment charge on Auchan Retail’s assets in Italy, France and Russia.

“Auchan Holding’s 2018 earnings are under par. They were hit hard by the performance of Auchan Retail,” said Auchan Holding management board chairman Edgard Bonte.

The protests – named after the bright yellow jackets worn by demonstrators – erupted in mid-November originally over fuel price hikes and the high cost of living but have since spiralled into a broader movement against President Emmanuel Macron, hitting the transport and retail sectors hard.

In order to improve its results, Auchan has launched a plan to modernise its hypermarkets, accelerate its online expansion and focus more on smaller convenience stores. It also closed 23 loss-making stores in Italy and 11 stores in Russia last year.

(Reporting by Dominique Vidalon; Editing by Sudip Kar-Gupta and Elaine Hardcastle)

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