Casino Group Navigates Restructuring: Job Cuts, Financial Recovery, and a Shift in Strategy

Casino, the French retail giant encompassing brands like Monoprix and Franprix, is undergoing a significant transformation marked by job cuts, financial restructuring, and a strategic pivot toward convenience and local markets. The company, now under the control of Czech billionaire Daniel Kretinsky, has announced a revised plan for workforce reduction in 2024, alongside promising signs of financial recovery.

Originally projecting 3,000 job losses, Casino’s social plans for 2024 will now result in approximately 2,200 layoffs. Group CEO Philippe Palazzi confirmed this figure on Friday, February 28th, noting that "nearly 90% of the layoffs" have already been communicated to employees. He had previously indicated a range of 2,200 to 2,300 job cuts.

These announcements arrive amidst a period of profound change for Casino, following its acquisition and a substantial reduction in losses in 2024. Management emphasized that 1,000 potential layoffs were averted through internal redeployment, natural attrition, and a voluntary departure program.

Casino’s struggles are not unique within the French retail landscape. Competitor Auchan also announced a significant social plan in late 2024, threatening 2,400 jobs in France and involving site closures. This reflects broader challenges facing traditional large-scale retail models in a rapidly evolving consumer environment.

The financial report for 2024 offered a glimmer of hope for Casino. The group significantly reduced its net loss to 295 million euros, compared to a staggering 5.7 billion euro loss in 2023. While revenue declined by 5.4% to 8.5 billion euros, the dramatic reduction in losses signals progress in the company’s turnaround efforts. Palazzi described 2024 as a "year of profound transformation," with results still impacted by past difficulties.

Appointed in March, Palazzi has been instrumental in driving the restructuring plan. In a statement, he affirmed that his team has implemented the plan "effectively and according to the established timeline."

The new leadership team aims to reposition Casino as a leader in the convenience market, focusing on its smaller-format stores like Monoprix, Spar, Vival, and Naturalia. These stores are typically located in city centers and offer a range of services, catering to evolving consumer preferences.

A key element of this strategic shift involves divesting from hypermarkets, which Palazzi identified as "major sources of loss." He believes this decision will allow the company to "look to the future with confidence." In parallel, Casino opened 268 new stores in 2024, carefully selecting locations, franchisees, and brands. The group aims to achieve a "return to profitability" by 2026.

Palazzi explained this strategic direction by pointing to changing consumer habits, stating, "We are in an economy of laziness." He argued that younger generations in large cities are less willing to travel to make purchases, while an aging population in rural areas faces difficulties with mobility.

Before its debt restructuring in mid-2024, Casino employed 200,000 people worldwide at the end of 2022. The restructuring involved significant financial contributions from Kretinsky and Marc Ladreit de Lacharrière, in exchange for controlling interest in the company.

Over the past year, Casino sold its large-format stores, its historical core business, to competitors Intermarché, Auchan, and Carrefour. These transactions involved 366 hypermarkets and supermarkets and generated 1.8 billion euros in revenue in 2024.

Casino has also focused on streamlining its overall store portfolio, closing 768 underperforming locations. Notably, 87% of these closures involved franchisees and tenant-managers, including 207 Franprix stores.

To enhance competitiveness, Casino implemented targeted price reductions on over 500 essential products at Monoprix, Franprix, and Casino stores.

Casino also owns Cdiscount, an e-commerce platform. In 2024, Cdiscount’s revenue declined by 16.3% to just over one billion euros. The company attributed this decline to its strategy of prioritizing sales by third-party vendors over direct sales. This shift reflects a broader trend in e-commerce, where platforms are increasingly focusing on marketplace models.

In summary, Casino is currently navigating a complex period of restructuring and strategic realignment. The company’s efforts to reduce debt, streamline operations, and focus on the convenience market represent a significant departure from its historical focus on large-format retail. While job cuts are a painful consequence of this transformation, the company’s improved financial performance and strategic vision offer a potential path towards long-term sustainability. The success of Casino’s turnaround will depend on its ability to adapt to evolving consumer preferences, effectively manage its store network, and leverage the strength of its established brands. The coming years will be crucial in determining whether Casino can successfully reinvent itself and regain its position as a leading player in the French retail market. The focus on smaller store formats and catering to local needs suggests a recognition of the changing dynamics of retail and a move to align with modern consumer behavior. Whether this strategy will be enough to overcome past challenges and secure a profitable future remains to be seen.