Christian Couvreux, president of Casino, looks to the future with brimming optimism. There are two reasons for his optimism. Firstly, Casino is well positioned in most countries and secondly, development prospects overall are good. The company's goal is clearly to be market leader in each country where it operates.
Elsevier Food International, Vol. 6, Number 2, May 2003
Ava Eschwege

Christian Couvreux, Casino's chief executive, has a good reason to greet 2003 with brimming optimism. As far as Couvreux is concerned, Casino has taken in stride the tough challenges in the past year and has squarely met the goals that would have daunted lesser rivals. "It is a year of good performance, well supported by the French activities and particularly by the wonderful progress of our small and convenience stores. All our formats have been improving more quickly than the average growth experienced in this sector," says Couvreux. Moreover, to the chairman of one of France's most ambitious food retailers, the multi-format strategy (hypermarket, supermarkets, convenience, Franprix and Leader Price) remains a continuing priority. With 70 per cent of its operating result achieved in the convenience and discount formats, Casino has again proven itself to be the French specialist of small store operators, even as it increasingly projects the image of an international player. "These small convenience stores are foundations for strong growth, are less sensitive to economic changes and tough competition and shows higher profitability than other store formats," adds Couvreux. To Casino, if the business of convenience store performs exceptionally, it only adds proof to the vision that it is "the format of the future."

Christian Couvreux (53), a graduate of business and economic science (HEC and INSEAD) started his career at the French Embassy in Norway. In 1978, the Andre group recruited Couvreux as commercial officer. In 1982, he joined the CFAO as director of CFAO Congo (Africa) and later as a food retail director based in Paris. He was appointed CEO of La Ruche Meridoniale. He joined Casino in 1990 and is now president of the group.

Pushing food sales
Couvreux is particularly proud of Casino's high food sales. "We have invested heavily in food in all our hypermarket and convenience stores. It used to be one of our weaknesses. We have now addressed this problem. The fact that food sales represent 85 per cent of our total sales is very important for Casino. The same thing goes for our communication on our low price strategy introduced four years ago. Even with this gradual approach, Casino has still won new market shares in 2002 for its supermarket and hard discount networks. In France, the discount stores continue to clearly gain ground. Leader Price, our discount shop improved last year by 13.8 per cent." Does the fact that the discount group grew in almost all markets prompt Casino to change tack and somehow reign in the growth? "Absolutely not since we benefit from it with our Leader Price outlets," says Couvreux.
Due to the fact that Casino is mainly a French retailer and is more profitable in its domestic market, the group continues to struggle overseas. "We have done a lot better from our French operations and from the convenience stores but we also have an international mission. If need be, we will sell or exchange our non-strategic assets," adds Couvreux. "Our international sales account for six per cent of the group's operating results. The difficult economic context combined with the strength of the euro accounts for this tough situation." However, Couvreux remains hopeful for the future for Casino's worldwide operations. "We have two reasons to be hopeful. Firstly, we are well positioned in most countries to benefit from an economic rebound. Secondly, the strategic acquisition of a holding in Dutch retailer Laurus, gives us good development prospects. "

Ambitious strategies
Having launched its first overseas operations only in 1999, Casino is a newcomer to foreign expansion compared to its rivals. Its inexperience is also reflected in the fragmented or unbalanced performance of its foreign division. Overseas, Casino's performance was also marred by the lingering economic crisis and unstable exchange rates. "We are doing well in Latin America, equally in Thailand but we're having some difficulties in Poland and in the US," says Couvreux. How does Casino assess the results in Latin America or face the crisis in Poland? "In Brazil, a country, which we really believe is favourable to current investments and has shown good commercial performance, CBD (Companhia Brasileira de Distribuicao) has shown improved sales all year round. With the acquisition of Se, CBD has confirmed its leadership in Brazil. Besides, it has reinforced its leadership over Carrefour. Brazil has real potential. In Colombia, Exito notably suffered because of the repositioning of Ley supermarkets. "
In Poland, Casino has initiated a strong action plan to ensure its place in a very competitive market. "Our network has run headlong into the bad economic consequences of oversupply. There is indeed no French retailer that has ignored this geographical zone. All the retailers there opened point of sales. Our strategy is to wait quietly until Poland's entry into the EU. It is therefore out of the question to pull out. Instead, one needs to implement a drastic action plan," adds Couvreux.
This year, Casino plans to reduce its stocks, its workforce, review selections, revise its public promotions strategy, negotiate procurement more effectively and launch the Leader Price concept in 40 new stores. "If today the offer exceeds the demand, this demand will doubtless catch up with the offer. Some retailers may leave. Poland is not a bad country to do business. We simply have to be patient, and it could take a while," he says.

Troubled regions
Another tough region for the group is the US. The French retailer is facing some difficulties at its Florida outlets although its California stores have posted sales growth. "Smart and Final have mediocre results. Stores are

"We have done a lot better from our French operations and from the convenience stores but we also have an international mission. If need be, we will sell or exchange our nonstrategic assets." Christian Couvreux

profitable but the food service and the stores in Florida continue to loose money. Today, we are determined to put an end to this position but we cannot say more at the moment," explains Couvreux. In Asia, Casino's Taiwan operations also posted weak results. "We have no expansion plans in this country. Development plans in the region is not on the agenda," Couvreux says. Finally, Casino has noted that development in the Indian region has produced better results than in other markets. "Vindemia posted remarkable profitability as it has good knowledge of the region. It should also be noted that this retailer has a real logistic knowledge too. "
When asked about group strategy, Couvreux's replies were unequivocal. "Clearly to be Number 1 or Number 2 in each country where Casino is present in order to allow a strong rebound," says Couvreux. To achieve this goal, Casino is giving itself the time, even in troubled regions, to seize opportunities for consolidation. "We are setting up strong action plans in difficult areas. Besides we are profitable in almost all the countries we're in." And how would Casino respond should an opportunity arise to make new acquisitions? "We will not overpay just to grow. But in certain countries, such as Argentina, which is a well-known disaster area, there will be probably opportunities to buy at low prices," he adds.

Key growth areas
For 2005, Casino has identified growth areas: the dynamism of the convenience stores, the improvement of food sales and the development of its loyalty cards programme. Secondly, Casino is keen to push its goal to be a leader in the markets where it operates. "Consolidating these positions should allow us to take advantage of a rebound," says Couvreux. Finally, Casino expects the Dutch retail chain Laurus to boost its next results. "The strategic acquisition of holdings in Laurus (38.7 per cent in July 2002) should represent a significant source of growth for our group. Casino is hopeful that Laurus will show recovery at its Dutch operations this year," says Couvreux. So far, Casino has stuck to its recovery plan for Laurus and Couvreux noted' that Laurus has successfully mitigated the impact of the losses posted by its Spanish operations. The transfer of Laurus' Belgian assets will also be resolved in the coming months. "The application of the synergies is thus in progress. Finally, and more concretely, we are going to set up common information systems for the three retailers, which are based in our strategic area. Laurus is a conveyor of growth and has prime importance for Casino. In the event we decide to extend our participation from 38 to 51 per cent sometime in 2005, then it will represent a total of around €270 million investment."

The IRTS promise
Regarding IRTS, Couvreux expects the fledgling company to yield satisfactory results.
"We are expecting sound earnings and results from IRTS," says Couvreux. The IRTS (International Retail and Trade Services) was launched with Auchan in November 2002. Couvreux, however, emphasised that the main goals of IRTS are to negotiate and manage international agreements with international suppliers where both Auchan and Casino are present. "It's a solution for us to effectively negotiate with the big international suppliers and to assist small and medium-sized companies to export into countries where we are present," he adds. "It's not only a central purchasing group. And a merger between Casino and Auchan is not in the cards." Four months after the creation of IRTS, Couvreux sticks closely to his goals. Couvreux: "We fully complement each other. This joint organisation is expanding the scale of the two groups. Actually, we are getting to know each other better."