Auchan France has introduced a new price-matching campaign to its stores. In-store signage now highlights Auchan’s price to be the same as France’s price leader, Leclerc. The signage is accompanied by the tagline “All in all … Auchan is not more expensive”. We might also add "Auchan is not the cheapest, either".
Fig 1: Auchan’s new price-matching in-store messages (right). Price comparison animations and messages (left). Source: olivierdauvers.fr
The campaign is a part of Auchan’s strategy to reposition its price and brand as a consequence of losing sales growth momentum throughout 2013. Auchan’s new campaign brings an interesting twist to an increasingly aggressive French price war, with its softer touch. This is a practical attempt to compete in a market where “cheaper” has gradually lost its relevance and increasingly confuses as well as annoys shoppers.
Having recently gained a greater negotiating lever following the local purchasing alliance with Systeme U and its global alliance with Metro, Auchan are keen to communicate the right value proposition. It will be interesting to see what Casino and Intermarche do around price following a similar purchasing alliance. Casino has already had some degree of success having undertaken massive efforts to narrow the gap between itself and Lerclerc over the past few years. However, current market leader, Carrefour continues to implement an increasingly premium proposition as it looks to differentiate itself through greater service and quality.
In a price dominated market, where shoppers are ultimately confronted with the same price in both stores, the need to differentiate becomes greater. Therefore, Retailers in France will continue to reassure shoppers on price and entice them with their quality or service proposition. This might as well be the silver lining suppliers have sought for ever since the subsequent purchasing alliances announcements. A refocus of top retailers on operations and brand would ultimately benefit all, from shoppers to suppliers as all are increasingly putting a well-deserved price on quality.