Hard-discount: how Action breaks prices and invades France

    Hard-discount: how Action breaks prices and invades France

    DISCOUNT – Unbeatable prices, gigantic surfaces… Action, the Dutch discounter, has made a strong entry into France, with 546 stores in 7 years, including the largest in the world just opened in the Paris suburbs. What are the details of this dazzling success? Guided tour…

    – Virginie Fauroux

    Crockery mixed with cleaning products, decorative objects alongside DIY tools … Welcome to Action, a Dutch discounter whose weight continues to grow in France. Here, a third of the articles are offered for less than… 1 euro. Stores are springing up like mushrooms, and for good reason: their recipe for offering such low prices is unstoppable. Customers quickly become loyal buyers, and leave with all kinds of products, but rarely what they originally planned to buy.

    Just like Sabrina, a ready-to-wear saleswoman who visits the brand twice a week, and spends 80 euros each time. Games for her children, decoration, most of the time these are impulse purchases that she fully assumes. “Of course I buy a lot of stuff that I don’t need but that’s okay, I’m happy. It’s like it’s Christmas, we give ourselves gifts” , she jokes in front of the 7-8 cameras.

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    Action also means addiction for Annaelle. This young unemployed mother has found a way to fill her days: she goes to her favorite store three to four mornings a week. Her expenses reach a hundred euros per month while she earns only 900, but it is a ritual that she would not miss for the world. “I like it, I take advantage of it, there is a great atmosphere”, she blurted out. And with 150 new products a week, it’s like discovering a new store every time. Action also relies on a treasure hunt logic: the products are never the same on the shelves. Two-thirds are replaced regularly, which creates frustration. As a result, for fear of running out, the customer makes reservations and over-consumes.

    A minimalist decor

    Born in the Netherlands in 1993, the European discounter opened his first business in France in 2012, and since then it has grown exponentially. Each week, two new brands are created in France, in somewhat remote areas where rents are cheaper. Another trade secret, the stores always follow the same model: kinds of sheds with minimalist decor, with identical tiling and lighting, basic signage, and no background music to avoid paying copyright. Everything is thought out to reduce costs as much as possible.

    But unlike destockers, the merchandise is not sold on pallets. Quite the contrary. Particular attention is even paid to its layout on the shelves. “What would be good would be to have the ranges of cushions to cover at the same level, and the covers at the bottom”, tells the sales staff Céline, the manager of the Sainte-Geneviève-des-Bois store, which has just opened its doors. “We have things that are really in the current trend, we might as well highlight them as best as possible”, she explains.

    Daily arrivals

    To be as cheap as possible, the brand, opportunist, also identifies all the good deals: unsold, stocks, bankruptcies, and buys en masse from the Netherlands for its 1,500 European stores. With such volumes, it can negotiate unbeatable prices, and offer major brands 30% cheaper than in hypermarkets. Logistics costs are also kept as low as possible thanks in particular to double-deck semi-trailers, a brand innovation. They can thus transport 60% more goods compared to a conventional truck. In terms of profitability, this makes it possible to deliver three stores instead of one. This is not negligible since the brand has arrivals every day, and no stock to use less labor and less space.

    Global turnover: 5 billion euros

    Another tip, and not the least, salary costs are reduced to the maximum. At Action, even the store manager gets his hands dirty, and goes through all the positions at a frantic pace like any other employee: ordering products, tidying up shelves, managing the cash register, for an estimated gross salary. at 2,500 euros per month.

    “That’s why I signed with Action, it’s for dynamism. I prefer to be on the ground with my teams on a daily basis to perform them and also perform myself, because it is by being with the people that we learn a lot “, convinces Donia, the manager of the Briey en Meurthe-et-Moselle store, who has worked for the brand for five years. And when we ask management about the working conditions of employees, silence is required. For example, it is impossible to have any quantified information on work rates. Secrecy is also part of this business model. Performance side, again, no comment. Only official data, the brand’s global turnover amounted to more than 5 billion euros in 2019.

    An advertisement made by the customers themselves

    A flourishing business which is also a source of income for individuals. Aurélie, a former beautician and mother of two, founded her Youtube channel in 2012 to give beauty advice, but she quickly realized that what creates the buzz are her videos dedicated to the discounter. After a first broadcast in 2016, it saw its number of subscribers soar and now has 115,000. “These are videos that work very well and very quickly, and have a lot of interactions and comments. There is also a community side more than the others”, she explains. With this community of fans, the brand does not need to advertise. Everything goes through word of mouth and social networks. Aurélie earns 1000 euros per month thanks to the advertising spots that Youtube broadcasts before each of her publications, but the brand does not pay her a cent.

    Read also

    • “The price is crazy”: this Russian hard-discounter wants to be the cheapest in Europe
    • “Get the customer to come for 1 product and sell him 10”: the secrets of hard discounting to sell at a low price

    Based on this recipe applied to the letter, Action has become, in 7 years, the third favorite brand of the French and does not intend to stop there. The brand is expected to open more than 100 new stores this year.

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