French supermarket giant Auchan first targets Israel in Middle East

French supermarket giant Auchan is set to make its entry into the Israeli market in the near future, according to sources. The company has been actively exploring the possibility of establishing a presence in Israel for over six months and has been evaluating potential partners. Unlike Carrefour, which entered the Israeli market through a franchise model, Auchan is considering a more hands-on approach by establishing a subsidiary that will be partially owned by an experienced Israeli company. While the specific details of the arrangement are still being negotiated, an agreement is expected to be reached soon.

Auchan, one of Europe’s largest retailers, currently operates more than 3,700 stores in 13 countries and employs approximately 160,000 people. In 2022, the company generated revenue of around 33.5 billion euros. Auchan operates a diverse range of retail formats, including hypermarkets, supermarkets, convenience stores, and online stores.

The origins of Auchan date back to 1961 when the first store was opened. The company quickly expanded across France, becoming the country’s largest retailer by the early 1970s. In subsequent years, Auchan expanded its operations to Spain, Portugal, Italy, Belgium, and Poland. Over the past decade, Auchan has further expanded its presence in countries such as Russia, China, and Thailand.

Auchan is privately owned by the Mulliez family, who hold over 80 percent of the company’s shares and exercise control through a complex network of holding companies. The Mulliez family also owns the Decathlon athletic clothing chain, which currently operates 10 stores in Israel.

In recent years, Auchan has made two unsuccessful attempts to merge with Carrefour, which, if successful, would have made it the largest retailer in France, capturing around 30 percent of the local market share. Carrefour entered the Israeli market through a franchise agreement that was later acquired by the Electra Group. This allowed Electra to use the Carrefour brand and access the group’s extensive private-label catalog, offering a wide range of food, drugstore, and toiletry products. Auchan, on the other hand, has its own extensive catalog of private-label products and also offers branded products in non-food categories, including cleaning, makeup, and toiletries. Known for its budget-friendly approach, Auchan’s prices in France are slightly lower than Carrefour’s.

However, Auchan has faced challenges in the current economic climate, resulting in the closure of several unprofitable branches in France. Increased competition from other European retail giants has led Auchan to seek growth opportunities outside of France. The company has strategically identified the Middle East as a target market, with Israel being its first choice in the region.

The impending arrival of Auchan in Israel is expected to bring a fresh dynamic to the local retail landscape, offering consumers a new option with its extensive product range and competitive pricing.

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