Large-scale retailing in France from 1972 to 1986,
by Didier Bury.
The profound transformation which has taken place within the French commercial distribution system over the last twenty-five years or so has been studied on several occasions, but its importance has never been under lined with sufficient emphasis. The major distribution groups have played an essential role in these far-reaching changes, either contributing to the changes or emerging as a consequence thereof. It thus seemed interesting to analyse the commercial activities and the economic and financial structures of some fifteen major French retail units between 1972 and 1986 set within a historical context going back to 1962.
The main originality of this study is that it takes into account not only financially concentrated groups but also, for the first time, the associations retailers have set up in response to this new form of competition.
It becomes clear that the rapid, sustained growth of the large groups, faster than the rest of the trading sector, is linked to the development of the hypermarkets and supermarkets: consumer spending has risen sharply in the hypermarkets, but legislation has been brought in to curb the spread of new stores, while sales have slackened off in the supermarkets. The food and non-food sectors have been affected to differing degrees by this trend. The trend has been less marked in the non-food sector, which is less dependent on supermarket and hypermarket outlets, than in the food sector, where the traditional hierarchy has been shaken: the Coop, which was the trading group with the largest turnover until 1 980, has been dismantled; retailer groups like Leclerc, on the other hand, which had only just begun to make an appearance in 1972, had become the leading distribution structure by 1985.
Profit margins remained stable in relation to turnover in the non-food sector, but dropped considerably over the same period in the food sector, despite numerous moves towards diversification and an increasing tendency to take higher margins on non-food products. Associations of independent traders working with lower margins emerged as a hither- tounheard-of competitive force. Their recent interest in increasing their sales of non-food products constitutes a serious threat of traders specialising in these products, where there is little concentration to date.
Consequently, the different strategies which have developed have been shaped largely according to the needs of the different parties involved. In the food sector the development of groups was checked for a while by the legislation on new large-scale retail outlets, but they managed to stay afloat and expand beyond the national borders and diversify into sectors closely related to the distribution sector. Lately their restuls have fallen off somewhat because of strong competition from independent retailer associations and they have had to reorganize in order to regain their full efficiency. The Coop system, caught up in a contradiction between principles and the need for modernization, failed in its attempt to expand and was forced to break up. Associations of independent traders on the other hand, enjoying the benefits of the respite afforded to them by the Royer Act, managed to organize themselves in such a way that they rose into the ranks of the most dynamic trading goups. In the non-food sector, which is dominated by the chain stores, the difficulties were of a specific nature and thanks to the efforts they have made towards internal rationalization these stores are now able to face the future with confidence.
In general terms it would seem that the large-scale retail trade in France is not badly placed to face the new terms of competition which will be opened up by the future single European market in 1992.
JEL : 633
Large-scale retailing in France from 1972 to 1986, by Didier Bury. The profound transformation which has taken place within the French commercial distribution system over the last twenty-five years or so has been studied on several occasions, but its importance has never been under lined with sufficient emphasis. The major distribution groups have played an essential role in these far-reaching changes, either contributing to the changes or emerging as a consequence thereof. It thus seemed interesting to analyse the commercial activities and the economic and financial structures of some fifteen major French retail units between 1972 and 1986 set within a historical context going back to 1962. The main originality of this study is that it takes into account not only financially concentrated groups but also, for the first time, the associations retailers have set up in response to this new form of competition. It becomes clear that the rapid, sustained growth of the large groups, faster than the rest of the trading sector, is linked to the development of the hypermarkets and supermarkets: consumer spending has risen sharply in the hypermarkets, but legislation has been brought in to curb the spread of new stores, while sales have slackened off in the supermarkets. The food and non-food sectors have been affected to differing degrees by this trend. The trend has been less marked in the non-food sector, which is less dependent on supermarket and hypermarket outlets, than in the food sector, where the traditional hierarchy has been shaken: the Coop, which was the trading group with the largest turnover until 1 980, has been dismantled; retailer groups like Leclerc, on the other hand, which had only just begun to make an appearance in 1972, had become the leading distribution structure by 1985. Profit margins remained stable in relation to turnover in the non-food sector, but dropped considerably over the same period in the food sector, despite numerous moves towards diversification and an increasing tendency to take higher margins on non-food products. Associations of independent traders working with lower margins emerged as a hither- tounheard-of competitive force. Their recent interest in increasing their sales of non-food products constitutes a serious threat of traders specialising in these products, where there is little concentration to date. Consequently, the different strategies which have developed have been shaped largely according to the needs of the different parties involved. In the food sector the development of groups was checked for a while by the legislation on new large-scale retail outlets, but they managed to stay afloat and expand beyond the national borders and diversify into sectors closely related to the distribution sector. Lately their restuls have fallen off somewhat because of strong competition from independent retailer associations and they have had to reorganize in order to regain their full efficiency. The Coop system, caught up in a contradiction between principles and the need for modernization, failed in its attempt to expand and was forced to break up. Associations of independent traders on the other hand, enjoying the benefits of the respite afforded to them by the Royer Act, managed to organize themselves in such a way that they rose into the ranks of the most dynamic trading goups. In the non-food sector, which is dominated by the chain stores, the difficulties were of a specific nature and thanks to the efforts they have made towards internal rationalization these stores are now able to face the future with confidence. In general terms it would seem that the large-scale retail trade in France is not badly placed to face the new terms of competition which will be opened up by the future single European market in 1992. JEL : 633
