The Auchan supermarket at 181 Cao Thang in HCMC’s District 10 will be closed on June 2. Auchan Retail will temporarily keep three supermarkets open in HCMC.
On May 15, French newspaper Les Echos quoted Edgar Bonte, CEO of Auchan Retail as saying that the group had decided to sell its 18 retail stores in Vietnam.
Auchan has terminated its employment contracts with most of its workers in Vietnam, who received the news several days ago.
The director on May 20 told the Saigon Times that the three operational supermarkets are Auchan Hoang Van Thu in Tan Binh District and Auchan Era and Auchan Crescent Mall in District 7.
These supermarkets will remain in service until Auchan completes negotiations with its business partner regarding the outlets’ takeover. No further details on the business partner have been revealed.
Meanwhile, the 15 other supermarkets will be closed from June 2, including 10 facilities in HCMC, three in Hanoi and one in the southern province of Tay Ninh.
Auchan’s customers were informed of the closure by email, while customers participating in loyalty programs were told to redeem their bonus points on their membership cards to ensure they receive their benefits. Also, customers can continue to use their rewards at the operational supermarkets after June 2.
The retailer has purchased products, which still remain in stock, from its suppliers and has launched many promotional products, with discounts of up to 50%, for all customers shopping at Auchan outlets as a way to thank them, the Auchan representative said.
Someone who prefers to preserve his anonymity told VnExpress that Auchan’s operations in Vietnam have been bought by a local retail group. Auchan’s supermarket system is scheduled to be transferred to the buyer in June.
In 2018, Auchan’s business in Vietnam generated revenues of €45 million ($50.4 million) but was still making losses, said Bonte. Detailed figures of the losses was not revealed.
French supermarket group Auchan Retail’s plans to sell its loss-making business in Vietnam are already drawing interest from potential buyers, Reuters reported.
Auchan is the last remaining Western distributor in the Southeast Asian country, after French multi-national retail chain Groupe Casino exites in 2016, another French newspaper Le Monde said.
The decision to withdraw from Vietnam follows a deal earlier this week to sell almost all of operations of Auchan Retail Italia to Conad, which is a Italian co-operative retail group.
Auchan Retail had said in March that it was conducting a review of its loss-making markets, such as Italy and Vietnam where it has faced tough business conditions.
Launched in Vietnam in 2015, Auchan Retail’s supermarket system has established 13 supermarkets in Ho Chi Minh City, four in Hanoi, and one in the Southern province of Tay Ninh.
Auchan was the last western retailer leaving Vietnam, according to Le Monde. In 2016, German Metro AG completed the sale of its Metro Cash & Carry to TCC Group and Big C Vietnam was acquired by Central Group from French’s Casino Group. Both buyers in these two deals are from Thailand.
Vietnam’s retail market is considered to have huge potential for development but with fierce competition. Recently, the market witnessed the exit of several retailers such as Maximark, Fivimart or Shop&Go, which were all acquired by Vingroup.
