Retail

Auchan To Remain In Russia, Fozzy Group Counts Cost Of Conflict

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French retailer Auchan plans to maintain its presence in Russia, its CEO said in an interview published in the French newspaper Journal du Dimanche on Sunday, prompting Ukraine to call for a boycott of the international chain.

Auchan, which has around 30,000 staff, 231 stores and e-commerce activities in Russia, has already been criticised by Ukrainian President Volodymyr Zelenskiy for remaining operational in Russia after the invasion of Ukraine.

In the interview published on Sunday, Auchan's chief executive Yves Claude said he feared the company risked losing assets or exposing local managers to potential legal troubles if it pulled out of Russia.

The firm would also remain in Ukraine, Claude said, where its 43 supermarkets and around 6,000 staff, including in regions hit by the war, were operating under "extreme conditions".

"The most important in our eyes is to maintain our employees and ensure our primary mission, which is to continue feeding the populations of these two countries," Claude said.

'Not At War With The Russian People'

In a statement on its website, the retailer said that it would remain loyal to a 'population that has no personal responsibility in triggering this war. Abandoning our employees, their families and our customers is not the choice we have made. As French President Emmanuel Macron reminded us “we are not at war with the Russian people”.'

It also added that the closure of its activities would be a 'premeditated bankruptcy', leading to an expropriation of its business 'that would strengthen the Russian economic and financial ecosystem'.

Ukraine Calls For Boycott

Responding to the report, Ukraine's foreign minister called for a boycott of Auchan and all of its products.

"Apparently, job losses in Russia are more important than the loss of life in Ukraine," Dmytro Kuleba said on Twitter.

Ukrainian President Zelenskiy has said it was necessary that all Western companies leave the Russian market and do not cover their "thirst for profit" through "cheap" communication, explicitly citing Auchan and Swiss food giant Nestlé.

Read More: Nestlé To Suspend Brands In Russia, Including KitKat And Nesquik

The company generated €3.2 billion in sales in Russia last year, around 10% of its global sales, and expects losses this year in that market.

Fozzy Group Counts Cost Of Conflict

Elsewhere, Ukrainian retailer Fozzy Group, which operates the Silpo chain, has issued a statement in which it has outlined the current status of its network, one month into the conflict.

'At the beginning of the war we had 736 grocery stores,' it said. Now, 436 are working. 59 are partially or completely destroyed, 40 are on guard duty in a combat zone.'

It also noted that a frozen goods warehouse close to Brovary was destroyed by a missile, resulting in the loss of 10,000 pallets of goods worth UAH 560 million (€17.2 million), while its central production facility in Vorzel 'has been completely looted'.

The group noted that its total financial losses to date, as a result of the war, currently stand at UAH 2.4 billion (€74 million).

'We will win, and rebuild everything,' it added.

News by Reuters, additional reporting by ESM – your source for the latest retail news. Click subscribe to sign up to ESM: European Supermarket Magazine.
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