Two new hypermarkets per year - Auchans objective in Romania

Auchan Romania is the newest player on the domestic retail market. Auchan has opened on the 7th of November 2006 its first hypermarket in Romania in Bucharest in the Titan area. The store has 16,000 sqm and was a EUR 40 M investment. French retailer Auchan is planning investments predicted to be over EUR 100 M, to build four new hypermarkets in Romania in 2007. Two will be constructed in Transylvania in Targu Mures and Cluj-Napoca, one in Pitesti and another in the south of Bucharest, in Berceni area. Auchan Group is an international retail group and multinational corporation headquartered in Lille, France. Auchan has branches in France, Italy, Spain, Portugal, Luxembourg, Poland, Hungary, Russia, Morocco, China and Taiwan. Today, Auchan is one of the world’s principal distribution groups. It is present in 12 countries with 1.13 billion clients at the end of 2005, 175 000 employees, 366 hypermarkets and 654 supermarkets.

Mr. Régis Mougel, what are the economic outcomes of Auchan hypermarket after the winter holidays and after only two months of activity in the Romanian retail market?

We cannot release any figure, but we are able to tell you that sales in 2006 were in line with our estimations, which entitle us to be optimistic in relation to this year.

When launching in the niche market of Romania, which took place in November 2006, you informed that you would open a second outlet in our country, in Berceni area, until the end of this year. Could you at least tell us during which period of the year is the launching of the second hypermarket expected and what is the amount that you would be willing to invest?

The hypermarket in Berceni would not be the only one during this year. Auchan considers other three hypermarkets within the country: in Targu Mures, in Cluj Napoca and in Pitesti.

Considering that all the hypermarkets we open are large (the one from Titan, opened in November last year, is one of the largest in the market, with 16,000 sq.m.), the average investment amounts to EUR 40 M.

What area will Auchan hypermarket stretch along, in Berceni, what capacity in terms of parking places will it have and how many new jobs will it bring?

Auchan hypermarket from Berceni is part of an ample commercial project, which will include a mall with 250 stores and restaurants.

The hypermarket will have a sale area of 124,000 square meters, 80 cash points and 1,800 parking places. The team to open Auchan hypermarket in Berceni will include 800 persons.

What will you bring in terms of new things within this new investment compared with the one from Titan?

The main difference is the location within a mall, being designed as an anchor for it. Further on, it will be an 100 per cent Auchan hypermarket, which preserves the same promise made to its clients: a range of products carefully selected and properly adapted to the market, and small prices, above all, for the whole range of products, not only for a small number of promotions.

Do you regard as an asset that Auchan is the first retailer which informs about concrete plans in the Southern part of the Capital, which so far has been avoided because of the lower purchasing power?

It is important that we are the first, but it is even more important to prove our clients that it is worth shopping at Auchan. The Southern part of the Capital has a huge development potential and we are confident in the success that Auchan hypermarket may achieve there.

What is the medium term growth strategy of the French group in Romania?

I was telling you earlier that Auchan had a concrete growth plan: we intend to open two hypermarkets per year, but we shall have four hypermarkets this year already, which is beyond the initial estimations. We hope to preserve this growth pace.

The Romanian retail market has become increasing appealing, particularly after the EU accession, which strengthens competition even more. What will be the assets of the French group Auchan in dealing with competition?

It is true that the are plenty of international retailers in the Romanian market, active in all categories of stores (hypermarkets, supermarkets, hard discounts, cash&carry). We are confident that the positioning adopted by Auchan, the strong development pace, the attention attached to our clients would secure success for us.

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