The new boss of supermarket group Casino has announced plans to ‘relaunch’ the company in a €1.2 billion overhaul, including slashed prices, more till assistants, and a design makeover of stores.
Philippe Palazzi became the company’s new director general in March, taking over from Jean-Charles Naouri, who had run the brand for 30 years. Mr Palazzi was previously part of the leadership team at dairy giant Lactalis.
He has said that he wants to revive Casino’s fortunes, after several years of downturn. In 2023, the group posted a net loss of €2.6 billion. It has now sold almost all of its supermarkets and hypermarkets (Casino and Géant Casino), having sold most of its loss-making stores to competitors Intermarché, Casino, and Auchan.
Mr Palazzi now plans to target convenience stores in urban areas, with the Petit Casino brand, whose main competitors include Spar, Franprix, Monoprix, and Naturalia.
“We are the leading local retailer with over 8,000 shops in France,” said Mr Palazzi. “We reach 42 million consumers every day. Today, the positioning of our companies, with our strong brands that are close to people in France, makes more sense.”
Price drops
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The team has pledged an investment of €1.2 billion over 2024-2028, alongside a raft of new measures designed to revive the company.
A major plan is to significantly reduce prices, after Mr Palazzi said that previously, Casino was selling some products at prices up to 20% higher than its competitors. One such example was a two-litre bottle of washing liquid being sold at €15, he said.
“We must hunt these out. We have identified 200 listings with ‘deadly’ prices. They were sometimes obscene,” he said.
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The company is also set to offer more own-brand products, and locally-sourced items.
Yet, the prices are unlikely to drop to levels offered by out-of-town stores such as Leclerc or Intermarché, the CEO said.
“We have high overheads, especially on town-centre rents, which are more onerous (although exceptional locations),” he said.
The CEO also plans to ‘rehumanise’ stores, including by replacing the rollout of automatic tills with humans behind counters. He said that sales had dropped by up to 20% since installing automatic tills.
“Automatic tills do not smile at clients,” said Mr Palazzi. “There is also less space to put items, so shoppers buy smaller and smaller baskets [of goods].”
Other services are also set to arrive at Casino stores in a bid to boost footfall and sales, including:
Boxes to drop off Airbnb keys
Luggage storage facilities
Parcel drop-off and pick-up boxes
The company is also working to roll out more franchise stores, in a bid to maintain a position as a leading convenience store.
Mr Palazzi said: “For our group to be successful, our franchisees must be successful too. That is why we must offer them favourable working conditions to convince them to work alongside us and associate with us.”
Employment protection…but job losses still
The company is also working to finalise its plan de sauvegarde de l’emploi (employment protection plan, PSE), which it presented at the end of April.
Despite this, however, between 1,293 and 3,267 jobs are expected to be lost as the company continues to restructure and recover. The head office will remain in Saint-Étienne (Loire, Auvergne-Rhône-Alpes), where 1,000 jobs out of a total of 1,800 have been saved, he said.
“We are committed to preserving jobs [where we can],” said Mr Palazzi, despite 80% of the company’s business having disappeared due to the sale of most of its supermarkets and hypermarkets.
One way it has sought to shore up jobs is to bring some roles in-house, whereas previously they were outsourced. These include IT, customer service, and payroll.
However, more jobs could yet be lost, and four major logistics warehouses owned by the company are yet to be sold. The deadline for the deal is September 2024, said Mr Palazzi, who added that there have been some “signs of interest” in the sites.
