Revenues from Auchan’s Africa operations in Senegal and Mauritania are up 152.5% year on year, from €40m in 2017 to €101m in 2018. The rise comes after the purchase of Dia’s supermarket network in Dakar and a rapid expansion program in Senegal that has seen it become by far the largest grocery retailer.
Auchan now has 28 stores in Senegal and two in Mauritania. Auchan also owns, via Portuguese subsidiary Jumbo, a hypermarket in Luanda, Angola. Auchan also has a 10% interest in Magasin Général, a leading Tunisian supermarket chain. Its Angolan revenues have not been included in Auchan’s Africa turnover.
In Senegal, Auchan is starting to move out of Dakar, with large stores in Mbour and Thiès. Nearest rivals Casino and Super U (both operated by Mercure International) have just 13 stores between them. Carrefour, via partner CFAO, launched its first store in Senegal in January 2019.
Auchan’s success in Senegal is emblematic of what is at stake for international retailers expanding in Africa. Auchan’s turnover actually fell between 2017 and 2018: its African operations were the only ones that grew. However, even with astonishing year on year growth, its African stores account for just 0.2% of the group’s turnover.
The question for Auchan (and for Super U, no less) is why it is in Africa at all. Auchan has tried, and failed, for years to open hypermarkets in Algeria, a notoriously retailer-hostile market. It is the only international supermarket chain in Mauritania, although Casino products are distributed there. It has invested heavily in expanding in Senegal, squeezing out Citydia’s local franchisee in the process. But it has outlined no plans to enter other francophone markets in Africa.
Côte d’Ivoire and Cameroon, two of the more obvious choices, are increasingly congested spaces for high end French supermarket chains. Carrefour, Casino and Super U are all present in Cameroon, as is Spar. Casino, Carrefour, Super U and Citydia (Dia) are all present in Côte d’Ivoire, where domestic retailers Prosuma (Casino’s partner) and CDCI have large store networks. Auchan has distributed product in Côte d’Ivoire via Top Budget, a small local chain. But it has outlined no plans to enter either country.
Which leaves a few options, all either risky or small (or risky and small):
- Guinea (Conakry), where Citydia have a franchise partner and a small store network
- DRC, where Shoprite are expanding and CFAO are known to want to open a Carrefour store
- Congo (Brazzaville), where none of the French chains are currently present
- Benin, where Super U have a small store network via partner Erevan
- Togo, Mali or Burkina Faso, where there are no international retailers (nor likely to be soon).
Perhaps the best option is Gabon, where there is a strong but vulnerable local player (Ceca Gadis), a single branch of Géant Casino (operated by Mercure International) and a couple of local chains (Prix Import, Sangel). The benefits of Senegal are that it has a relatively stable government and a relatively stable currency. It also can act as a supply route for both The Gambia. Gabon provides a similar stability and has so far been overlooked by major chains.
But we still question exactly what Auchan wants to do in sub Saharan Africa, and from where it is looking to achieve meaningful growth. Does it really want to operate in 2-3 country markets as a long term goal? It’s hardly sustainable.
