French Retail Research Articles

Leclerc: The Growth Challenge

The senior management team at Leclerc, one of the largest retailers in France, is considering how best to maintain growth in the highly regulated French retail industry. Strict limits on pricing and store construction will significantly limit Leclerc's flexibility; many of the traditional growth levers cannot be used. These regulations also have a major impact on competition. The executives at Leclerc must identify the optimal growth plan and then consider whether it will deliver the desired growth.The case can be used to examine three areas: growth strategy for established businesses, non-market strategy, and marketing planning. It provides an interesting look at the French retail industry and highlights the role of government regulations in shaping the competitive playing field.

The Determinants of Consumer Price Dispersion: Evidence from French Supermarkets

In this chapter, we characterize the dispersion of grocery prices in France based on a large original data set of prices in more than 1500 supermarkets across the country. On average across products, the 90 th percentile of relative prices is 17 percentage points higher than the 10 th . The mean absolute deviation from quarterly average product prices is 5% on average in the French retail sector, and the standard deviation of relative prices is 7%.We show that temporary sales and promotions offer a limited explanation of the observed price dispersion, while the permanent component of price dispersion largely dominates. We find that in France price dispersion across stores essentially results from persistent heterogeneity in retail chains' national pricing. Indeed, consumer prices are largely determined at a national level by retail groups' bargaining power with producers and by retail chains' positioning. We also show, however, that local conditions regarding demand and local competition between supermarkets do explain prices observed in local markets, though to a much lower extent.

The Impact of Services Brand Personality on Consumer–Brand Relationship Quality

ABSTRACTThis article investigates service brand personality's role as a driver of brand relationship quality. A research model links brand personality to four indicators of relationship quality: brand credibility, self-congruity, cumulative satisfaction, and loyalty. The model is tested with structural equation modeling using data from French retailing (N = 1188). The findings indicate very diverse effects of personality dimensions on the relationship quality: whereas competence has a very strong impact, other dimensions like agreeableness exert no significant effect. The research also highlights the pivotal role of self-congruity and brand credibility in mediating brand personality's impact on satisfaction and loyalty in services.

Modeling of the clinical and economic impact of a risk-sharing agreement supporting a treat-to-target strategy in the management of patients with rheumatoid arthritis in France

Objectives: To evaluate the cost-effectiveness of a Treat-to-Target strategy with certolizumab pegol in patients with rheumatoid arthritis in the context of a pay-for-performance agreement in which medication costs are refunded in case of discontinuation during the first 3 months of treatment.Methods: The Treat-to-Target strategy consisted of a systematic switch to second-line tumor necrosis factor (TNF)α inhibitor in case of an unmet ACR50 response at 3 months compared to current routine clinical practice. A reference cohort treated first-line with certolizumab pegol according to current practice without systematic switching was considered as the comparator. A decision-tree model was constructed to estimate clinical outcome (health assessment questionnaire-disability index or HAQ-DI score), time spent in ACR50 response (ACR 50), and direct costs of treatment over a 2-year period. HAQ scores were derived from American College of Rheumatology 50 (ACR50) responses. All TNFα inhibitors were assumed to have equivalent efficacy and tolerability. Costs were estimated at 2013 French retail prices (date of the pay-for-performance agreement).Results: The mean duration of an ACR50 response was 1.23 years in the Treat-to-Target strategy certolizumab pegol cohort vs 0.98 years in the reference cohort, resulting in a mean gain in HAQ at 24 months of 0.117. The Treat-to-Target strategy with a mix of TNFα inhibitors as second-line therapy was more expensive than the reference strategy in absolute terms, but this difference was entirely offset by the pay-for-performance agreement. The Treat-to-Target strategy was, thus, cost-neutral over a 2-year period after the payback of CZP cost for patients not achieving the target at 3 months.Conclusions: In the context of a pay-for-performance agreement, the management of patients with rheumatoid arthritis using a Treat-to-Target strategy with certolizumab pegol in first line is dominant compared to standard use of this drug in the French setting in 2013.

Sustainable transportation and order quantity: insights from multiobjective optimization

This article applies multiobjective optimization to show how the tradeoffs between cost and carbon emissions may be obtained in the context of sustainable operations. We formulate a model where transportation mode selection and order quantity decisions are considered jointly. We derive structural properties of the model and develop several insights. First, we show that switching to a greener mode of transportation while continuing to optimize the total logistics costs function may lead to a dominated solution. Second, we prove that the modal shift occurs only under strong carbon emissions reduction requirements. Third, we show that the efficient frontier is non-convex and we analyze some implications. Finally, we analyze the impacts of an increase in truck capacity. The results are illustrated through an example of a French retailer.

Concerning urban consumption: on the construction of market agencements for retail trade

This article investigates the modalities of integration of social, political and moral issues in urban consumption markets. Drawing on the concept of “concerning process,” it examines the specific shaping of urban market agencements at play in this context. The analysis follows the history of the reforms of the French retail implementation provisions over the past 40 years. By examining three significant episodes of this history, it highlights the importance of interweaving concerned actors in market agencements, and shaping market boundaries.

The European 'horsemeat scandal': A welcome opportunity for the <I>halal</I> supply chain?

The 'horsemeat scandal' that engulfed most of Europe in 2013 raises some interesting customer behaviour questions (Xie, Bagozzi, & Ostli, 2013), with further implications for business relationships involving multiple buyers and a single supplier. This meta-analytical study explores these relationships across two levels - business-to-business (B2B); and business-to-consumer (B2C). On the one hand, the B2B component suggests that when multiple buyers, such as the UK's largest supermarket chain (Tesco), six large French retailers (Auchan, Casino, Carrefour, Cora, Picard, Monoprix), and Dutch behemoths such as PLUS and Boni, become reliant upon a single supplier, Comigel, there are bound to be some practical trust implications. From a B2C perspective, on the other hand, buyer trust and consumer confidence (see Gray, Wert-Gray, & Carlon, 2013), as well as consumer perceptions (Akdeniz, Calantone, & Voorhees, 2013) and attitudes, are bound to change as a consequence of breaches in trust thus providing an opportunity for alternatives such as halal foods (Muhamad & Mizerski, 2013).

Prevalence and characterization of Campylobacter jejuni from chicken meat sold in French retail outlets

Campylobacter was detected in 76% of broiler meat products collected in retail outlets during a monitoring plan carried out in France throughout 2009. Campylobacter jejuni was the most prevalent species (64.7% of products being contaminated). The 175 C. jejuni isolates collected were characterized. MLST typing results confirmed substantial genetic diversity as the 175 C. jejuni isolates generated 76 sequence types (STs). The ST-21, ST-45 and ST-464 complexes predominated accounting for 43% of all isolates.A class-specific PCR to screen the sialylated lipooligosaccharide (LOS) locus classes A, B and C showed that 50.3% of the C. jejuni isolates harbored sialylated LOS.The antimicrobial resistance profiles established using a subset of 97 isolates showed that resistance to tetracycline was the most common (53.6%), followed with ciprofloxacin and nalidixic acid (32.9%, and 32.0% respectively). All the tested isolates were susceptible to erythromycin, chloramphenicol and gentamicin.Clear associations were demonstrated between certain clonal complexes and LOS locus classes and between certain clonal complexes and antimicrobial resistance.This work paints a representative picture of C. jejuni isolated from poultry products circulating in France, providing data on STs, LOS locus classes and antibiotic resistance profiles in isolates recovered from products directly available to the consumer.

The Hare and the Tortoise: Do Earlier Adopters of Online Channels Purchase More?

Earlier adopters of a product or service tend to be more valuable than later adopters. Does this empirical generalization equally apply to earlier adopters of a multichannel retailer's new online channel too? This study segments customers on the basis of their responses to a new online channel and investigates the effects of their online channel adoption on purchase volumes across segments. The data cover 12.5 years of purchase history and individual transactions at a large multichannel French retailer of natural health products. Contrary to conventional wisdom, it is not innovators or early adopters, but rather the late majority segment that purchases more than the other segments, both before and after online adoption. Adoption of the firm's new online channel does not influence purchase volumes of heavy shopper segments (late majority and innovators), whereas light shopper segments tend to increase their purchases after adopting this new channel.

Dynamic adaptation of supply chain collaboration to enhance demand controllability

In industries characterised by strong uncertainties on demand, supply chain collaboration has been considered an important factor to improve performance, but remains difficult to implement. Drawing on a comparative case study of the relationships between a Japanese manufacturer and three French retailers in the digital still camera industry, we delineate a series of contingent factors that determine the conditions under which supply chain collaboration with retailers can be effective. We propose the concept of adaptive collaboration, contingent on the product life cycle and retail partners' attributes, to determine the fit between product strategy and supply chain processes. We show how it can help solve some of the issues associated with the development of collaboration and help improve a company's supply chain performance.

Competition and Price Stickiness: Evidence from the French Retail Gasoline Market

Using daily price quotes from about 10,000 French gas stations, this paper empirically analyses whether the level of competition determines the degree of price stickiness on the retail gasoline market. The degree of price rigidity is measured by the frequency of price changes as well as the average duration of uncensored price spells, while the distance to the nearest station and the number of gas stations within a given radius are considered as proxies for local competition. The results confirm that local competition is an important determinant of the price-setting behavior of gas stations. Indeed, for both measures of price stickiness, we find that the degree of price rigidity is positively related to the distance to the nearest station, and negatively related to the concentration of firms in a given geographical area. This result can be notably explained by the fact that gas stations facing a high competitive pressure are more likely to adjust their prices more quickly and more frequently in response to crude oil price decreases than stations enjoying market power.

What future for the French retail generic market? Can generic companies survive?

The worldwide generic market doubled, in volume, over the past 10 years. It appears, at first sight, very attractive. However, generic companies’ profitability is on average lower than that of R&D-based companies and their future risk of deterioration higher due to stronger commoditisation. The attractiveness of generic markets being significantly different from one country to the other, thus, the author proposes an approach, that he has applied to the French market, to assess country-specific business opportunities and threats. The analysis of different stakeholders shows that the French generic market development has been driven by a series of governmental measures to encourage physicians to prescribe, pharmacists to substitute and deliver, and patients to accept generic products. Physicians, who did not play a major role so far, could be asked to prescribe significantly more generic products, or at least more genericized brands, so that pharmacists can substitute them. Retail pharmacists, who substitute more than 70% of genericized brands, have been instrumental in the development of generic products and will be asked to further increase their substitution rate. Patients, of whom almost two-third accepts generic products, are not expected to change their attitude over the short term. Generic companies, operating in France are in danger due to anticipated price cuts of the government in one hand, and the refusal of retail pharmacists to accept any decrease of their discounts, in the other hand. In such an increasingly unattractive environment, survivors will be the biggest generic companies which will manage to secure the lowest production costs and the highest Generic Preference Mix index.

Analysis of French generic medicines retail market: why the use of generic medicines is limited

The market share of generic medicines in France is low compared to other European countries. This perspective paper provides an overview of the generic medicines retail market in France and how the current policy environment may affect the long-term sustainability. Looking at the French generic medicines retail market and the surrounding regulatory framework, all conditions seem to be in place to create a healthy generic medicines market: the country has well-respected regulatory authorities, generic medicines enter the market in a timely manner and prices of generic medicines are competitive compared with other European countries. Despite the success of the demand-side policies targeted at pharmacists and patients, those targeted at physicians were less successful due to a lack of enforcement and a lack of trust in generic medicines by French physicians. Recommendations to increase the use of generic medicines in France round off this perspective paper.

Department upkeep and shrinkage control

Purpose – The strategic nature of the fresh fruit and vegetables (FFV) department for supermarkets and hypermarkets is unquestioned. Yet both practitioners and researchers have difficulty optimizing its performance. The purpose of this paper is to identify the key specific drivers of the performance of FFV departments with a special attention being paid to the deterioration of product quality. Design/methodology/approach – The authors used a two-step inductive modelling process relying on interviews with experts from within the sector and a multiple case study of four FFV departments belonging to a French retail brand. Findings – After highlighting that the deterioration of product quality on the shelves is a key particularity of FFV departments, the authors identify department upkeep and shrinkage control as key intermediate variables impacting the performance of FFV departments and show how these two parameters can be controlled using three main actionable levers: marketing, in-store logistics and procurement. Research limitations/implications – The discussion of managerial implications sheds light on other phenomena requiring further investigation: team management practices, the buying role of the department manager and tailored criteria for assessing performance. Practical implications – The research shows managers that optimizing department upkeep allows turnover to be generated which exceeds the sector average without impeding the productivity of the department. The authors stress that it is imperative to control shrinkage in order to meet margin performance objectives. Originality/value – This research is a step forward because it takes account of the elements distinguishing FFV from other fresh products to highlight the factors underlying high performance levels.

The determinants of margins in French retail gasoline markets

When studying oligopolies, a tension exists between models supporting tacit collusion and those supporting the noncollusive behaviour of firms. Using a panel on retail fuel margins in France over more than 20 years, we find mitigated evidence of collusive behaviour in the retail gasoline industry. On the one hand, we find lower margins when demand is expected to increase in the next period, which is a standard prediction for the noncooperative models. On the other hand, we also find evidence of tacit collusion as margins respond to input cost changes in the manner that the tacit collusion models predict: margins decline when the expected marginal cost increases. Our results leave open the question of collusion in the retail gasoline market.

The things that go without saying: on performative differences between business value communication and communication on business values

This article argues that analyses of value semantics in organisational image brochures, websites, and further official documents do not give information about an organisation's ethical performance. Based on a systems theoretical definition of values, the case is made for a distinction of communication on values and value communication, the latter of which is defined as implicit form of communication. This distinction is illustrated by examples of personal and organisational value communication at Coca Cola France, Marriott Belgium, Accenture India, and two French retailers as well as a contrastive discussion of the CSR activities of Grunenthal GmbH and Coca Cola Hellenic Bottling. The findings suggest that research on business performance management by metaphor should be complemented with a focus on management by allusion, the latter of which could turn out to be effective to such extent that it finally calls for ethical concerns itself.

Retail branding as a value creation process: managerial and research priorities

Purpose – The first purpose of this communication is to highlight retailers' current challenges related to branding as a value creation process. The second purpose is to identify existing organizational brakes that may slow down retailer brand building. The final aim is to indicate managerial and research priorities in retail branding. Design/methodology/approach – The article confronts the conclusions of previous research and the findings of a longitudinal case study conducted with a major French retailer and brand experts between 2004 and 2011. Findings – The authors identify managerial implications and four research priorities: cultural and organizational change, development and sharing of new capacities, customer behavior knowledge, and development of a strategic retailer brand building model. Originality/value – The question of creating and sustaining retailer brands in the long term is addressed both from a managerial and academic perspective. The longitudinal case study illustrates how a major Euro...

Service encounter in multi-channel distribution context: virtual and face-to-face interactions and consumer satisfaction

This article studies service quality and customer satisfaction in a context of multi-channel service distribution. The objective is to identify quality factors influencing the overall satisfaction of a multi-channel customer. A quantitative study was conducted among 445 customers mainly targeted on users of the traditional physical channel and online channel of a French retail bank. Using structural equation models with AMOS, the results show that perceived service quality in the virtual channel, perceived service quality in the traditional channel, and multi-channel integration quality have a positive influence on the overall satisfaction of the multi-channel customer.

The experience of time in the inter-organizing inquiry: A present thickened by dialog and situations

Following in the footsteps of scholars view of organizations as organizing processes, this research focuses on the temporal dimension of organizing, more specifically, the temporal dimension of (re)organizing inter-firm cooperation. As such, in this article we suggest that by viewing organizing processes as inquiries in the pragmatist sense, one can shed light on the experience of how time unfolds within the contextual conditions of developing interaction. We stress two key characteristics of organizing inquiries: (1) they are situated, and this situation is the source of unexpected events, surprises and novelty and (2) they are dialogical, and the unpredictable dynamics of dialog also punctuate their temporal course. This framework is used in the participant observation of a strategic project in the French retail industry, whose aim was to redesign supplier–retailer relationships using a category management approach. The empirical data gathered demonstrates how the organizing process develops as a situated and dialogical inquiry, and how the past, the future and the “elsewhere” of a situation are rolled together into the ongoing experience of the present moment. Our conclusion summarizes the contributions of this study and suggests avenues for future research into organizing processes.

Economic Performance and Customer Expectation in e-Fulfillment Systems: A Multi-Channel Retailer Perspective

Store-based retailers are increasingly opening an additional online sales channel and becoming multi-channel retailers. Moreover, formerly pure online retailers are opening stores or physical pick-up points to allow their customers physical interaction and product pick-up. The integration of these different channels raises the question of how to redefine the operations and the strategic marketing elements because the two channels have different constraints and require different competencies. This multi-channel retailing has a major effect on operations and supply chain management. Order fulfillment for customers using the different sales channels is a key challenge, and customers are directly affected by the performance of this process. In this article, four e-fulfillment systems are identified according to the locus of order preparation (distribution center or in-store) and the means of delivery to the customer (home delivery or pick-up by the customer). Based on a literature review in supply chain management and in marketing, five economic performance and four customer expectation indicators are identified. The differences between the four e-fulfillment systems based on these indicators are examined from theoretical and empirical points of view relying on eight semi-structured interviews with supply chain managers, directors of points of sale, and senior operations managers of French retail companies.