'Yellow Vests' Protests In France Prove Costly For Retailer Auchan
French supermarket group Auchan's 2018 profits suffered a blow from the country's anti-government 'Gilets Jaunes' 'Yellow Vests' protests, costing the retailer €140 million ($157 million) in revenue, it revealed.
Auchan also faces fierce price pressure in its home market from the likes of Carrefour and Leclerc as well as competition from Amazon.
A tough market hit its results in Italy too and in Asia where its Sun Art Retail subsidiary faces online competition.
Earnings before interest, tax, depreciation and amortisation (EBITDA) at Auchan Retail slumped 20.5% to €1.52 billion in 2018 at current exchange rates.
Total revenue at Auchan Retail was €50.3 billion, representing a 3.3% decrease at current exchange rates.
Revenue in France alone fell 1.3%, with the "Yellow Vests" protests knocking €140 million off revenue and €35 million off EBITDA.
'Yellow Vests' Protests
The months-long protests forced many shops to shut down on Saturday in central Paris, as the capital suffered its worst rioting and vandalism in decades.
Auchan Retail is part of the unlisted Auchan Holding company, which also includes the Ceetrus property business and the Oney banking business.
Auchan Holding posted a 2018 net loss of €997 million ($1.12 billion) following a €1.1 billion impairment charge on Auchan Retail's assets in Italy, France and Russia.
"Auchan Holding's 2018 earnings are under par. They were hit hard by the performance of Auchan Retail," said Auchan Holding management board chairman Edgard Bonte.
The protests - named after the bright yellow jackets worn by demonstrators - erupted in mid-November originally over fuel price hikes and the high cost of living but have since spiralled into a broader movement against President Emmanuel Macron, hitting the transport and retail sectors hard.
In order to improve its results, Auchan has launched a plan to modernise its hypermarkets, accelerate its online expansion and focus more on smaller convenience stores. It also closed 23 loss-making stores in Italy and 11 stores in Russia last year.