Auchan has announced that it will enter the proximity channel in Portugal. Diário Económico reports that the retailer intends to open six minimarkets in 2017, under the banner name ‘My Auchan’. Some EUR6mn will be invested in this project. The urban stores will be sized between 200-500 sq m and will be centred around three distinct areas – fresh produce, snacking and FMCG – with an emphasis on chilled, organic and healthy eating products.
We see this move as being a direct result of Auchan’s reasserted multi-format strategy across Europe. Indeed, Portugal is its only Western European operation (bar Luxembourg) where Auchan exclusively operates hypermarkets. Going after a small store format is nothing new. The retailer already hinted at its plans for a franchise-fuelled smaller formats expansion back in 2015 – bringing potential supermarkets under the Pão de Açúcar banner – a plan unheeded to this day.
Much has changed over the past few years. Auchan’s corporate headquarters unveiled its one-brand strategy and rolled out its latest neighbourhood stores concept in France. We believe Auchan Portugal was given the turn-key store concept and blessing to initiate minimarket roll-out in this saturated market. Auchan Portugal has not yet given expansion details beyond the initial openings, but leveraging a franchise model would make sense.
Whilst we agree that there is definitively room for such a venture in the country's urban centre, Auchan lags behind its competitors, who are all trying to tap into the traditional sector. Sonae Meu Super and Jerónimo Martins Amanhecer soft-franchises come to mind; as well as Intermarché cooperative who is looking to recruit new members – and these are just a few examples.