Each summer inevitably revives the debate: will Kylian Mbappé play for Paris Saint-Germain or Real Madrid next season? This 2023 vintage is no exception, with persistent rumors on both sides of the Pyrenees. But this time, the French striker is not alone in igniting the summer transfer window – the time of year when the stars change stables. Far from the round ball, another big fish is available: the Casino group. The supermarket chain is looking for a takeover due to financial difficulties. And except – umpteenth – reversal, the Czech billionaire Daniel Kretinsky should win the bet.
The same week, the Carrefour group announced the acquisition, in the summer of 2024, of the Cora and Match brands, a new blow of heat in the mercato of large retailers. The football filiation does not stop there: recent years have seen the downgrading of “small” football clubs in favor of super strongholds. And now, in turn, the large French distribution sees the emergence of hyperpowers.
Chronicle of an announced destiny
“For a long time, the supermarket model has been waiting for concentration and consolidation, informs Yves Marin, consumer specialist and large retailer at the consulting firm Bartle. In all sectors, the time is for consolidation and overdominant giants instead of many small groups, continues the expert. The supermarket world is only catching up on this logic”.
Olivier Dauvers, retail expert and author of the books The French Trade Saga (Dauvers edition, 2004) and The essentials of tomorrow’s commerce (Edition Dauvers, 2015), makes the same observation. With nine major players (E.Leclerc, Carrefour, Intermarché/Les Mousquetaires, Auchan, Casino, Système U, Lidl, Aldi, Cora), the French market “is far from being as concentrated as it could be. There is plenty of room for one or two mergers. In 2019, the CEO of Carrefour, Alexandre Bompard, also believed in The Express that a merger between different groups was “inevitable” in order to survive in a hypercompetitive sector.
Get bigger to be stronger
“Weighing heavily on a market counts in all areas, but perhaps even more in mass distribution, underlines Sandrine Heitz-Spahn, doctor in management sciences from the University of Burgundy and teacher-researcher in marketing at the University of Lorraine. Because being big means having power”, especially during price negotiations with manufacturers. Big fish there too.
“In absolute terms, Coca-Cola has the means to impose its prices on E.Leclerc because it can dispense with being distributed to them if no agreement is reached. But that amounts to doing without almost a quarter of the French market, ”underlines the specialist. Not really the deal of the century, then. But if Casino refuses to distribute Coca-Cola, the brand of drink is deprived of less than 6% of the market. Not the same drama.
This finding is nothing new. Mergers have been attempted in the past. The Canadian giant Couche Tard had tried to swallow Carrefour in 2021, before undergoing a veto from Bercy. Casino and Auchan have been turning around for years.
Inflation, last turn of the screw in favor of hyperconcentration
To understand why everything seems to be settling this year, just remember the hit of the past 12 months: inflation. “In times of economic difficulty, the weak are always weaker. Casino has never had a large market share, and this has been drastically reduced with the price crisis, which has benefited the largest groups, more able to maneuver on prices,” says Olivier Dauvers. Casino’s share of the French market fell from 7.1% in March 2023 to 5.8% in June. The “small” groups, more isolated, are also easier to redeem.
Negotiations on prices, favorable to the biggest, have become increasingly decisive in attracting consumers. Of course, reminds Sandrine Heitz-Spahn, the price has always been the sinews of war. But with inflation, it is no longer just the nerve, but downright the backbone of decision-making. “The large groups, which have been able to glean the best prices from suppliers, are widening the gap”, underlines the doctor.
The E.Leclerc of Madrid
This is the second reason for this so active transfer window: the large French distribution has its hyperpower, its Real Madrid, E.Leclerc. The group now weighs 23.5% of the market, compared to 21.8% in the summer of 2021. This is 3 points more than its first pursuer, Carrefour, at 19.9% of market share. “All food retail players are understanding that they have to react in order to grow and not be left behind by E.Leclerc, which is on an impressive trend,” said Clément Genelot, distribution specialist for the bank. investment company Bryan, Garnier & Co.
And to grow, we repeat ourselves, there are not 36,000 solutions: merging remains the simplest. “It’s easier to buy existing stores than to build new ones,” admits Sandrine Heitz-Spahn. Merge, grow and concentrate, always more. The sense of history, in a way. “In the 1950s, the retail market was very fragmented, with more than fifty regional players. The 1970s saw a first concentration around fifteen. Today there are nine, but there will probably only be three or four left. ” Same observation at Yves Marin: “The mergers will not stop there and the market will continue to regroup in a few hyperpowers. “What animate the next mercatos.