“The world is changing at great speed, consumption patterns too, especially for us traders” : with these words, Olivier Mercier, Managing Director of Caillé Grande Distribution, summarizes the challenges of the current period for commerce and, beyond commerce, for all economic actors : everything evolves, at an accelerating pace, and the constraints and adaptations imposed by the Covid-19 pandemic certainly complicate things, but above all reinforce the trend. It should first be noted that Olivier Mercier is the first leader of Reunion Island retail to speak publicly about the changes underway and their repercussions on consumption., and this while the pandemic is still far from being under control. So it’s a “hot” interview, in a certain way, where the general director of Caillé Grande Distribution takes stock of the strengths of the brands (Leader Price, Leader Price Express, Promocash) and logistics entities (in particular Cash@Pro) of the group in this period. The first of these assets being proximity, which takes on a new meaning today, what Leader Price's new brand identity perfectly expresses. Digital services are another strong point of Caillé Grande Distribution in the current context. Olivier Mercier confirms the development with, notably, the opening of Leader Price drives. He also announces the rise of the Leader Price Express brand, which will more than double its number of points of sale..
How are the Leader Price and Promocash brands doing in mid-2021?, while the pandemic is not yet behind us ?
We experienced a tormented year 2020 which nevertheless allowed us to highlight the essential nature of the food trade. Chez Leader Price, we were able to respond in new and degraded circumstances by managing the massive influx of customers while respecting barrier gestures. On the contrary, Promocash experienced a diametrically opposite situation, suffering the full brunt of the closures imposed on the catering sector. We were hoping for a return to normal in early 2021, It is clear that this pandemic is long-term, history is repeating itself.
Has the crisis changed the way you manage and plan for the future? ?
The crisis has above all changed consumption patterns, forcing us in turn to urgently adapt to customer expectations. Today, our customers have reduced the number of their visits to the store by limiting risk-taking and de facto by purchasing more with larger average baskets. Consumption patterns have also changed depending on the periods of the crisis., basic foodstuffs are in greater demand to the detriment of more marketed and specific products.
Do the facts seem to support those who thought that things would return to the way they were before after the health crisis? ? Or do you perceive a change in consumer choices and practices? ?
Of course we could see things returning to normal., but we live in an uncertainty which does not allow us to project ourselves calmly into the future. We are waiting for stabilizing signs that would allow us to definitively turn the page. Fortunately, l’engagement, the determination and professionalism of the teams allow us to meet our daily challenges.
Can we define Leader Price, first supermarket brand in Reunion, as being, within the large retail sector in Reunion, the ultimate convenience store, halfway between small and large commerce ?
With our four brands, Leader Price, Leader Price Express, Promocash and Cash@Pro, we have a total of 33 points of sale spread across the island meeting the growing needs for proximity desired by the people of Reunion Island. In details, we manage 19 Leader Price supermarkets with our franchise network, 10 Leader Price Express convenience stores, 3 Promocash and our fresh produce delivery entity to CHRs, Cash@Pro. Customers appreciate our proximity in the broad sense : making our products available at the best price, our quality of welcome and the attention we pay to our customers. It is the commitment at all levels of our teams that allows us to forge this fundamental bond with our customers..
The advantage of proximity was manifested during confinement, to the point that more than once the cashiers at Leader Price received a standing ovation from customers. Feel, you too on your own scale, a lasting revival of consumer interest in local commerce ?
Last year, from the first day of confinement, while most Reunionese employees were asked to stay at home, for them, no choice but to go to work. They, it is the cashiers who, in the same way as the nursing staff,, exercise an essential profession and have enabled the population to continue shopping and the food economy to function. The crisis has put a spotlight on this profession, which is often little known to the general public and is much more complex than simply passing items through the checkout.. We realize the collective usefulness of the sector and customers applaud the cashiers, and it’s a strong gesture. After 18 months of crisis and a few days after the entry into force of the health pass, we sense a lack of enthusiasm from our customers who are waiting for better days to return to the normal course of their lives.
In this context, Are Leader Price Express small Leader Prices or a full-fledged local business format that you wish to develop? ?
Director of the Distribution Branch
We have been thinking for several years about the idea of being able to provide all Reunion customers with an attractive local offer.. Whether you are in areas with a high population density or in areas that are more difficult to access, our Leader Price Express provide this answer with human-sized stores of up to 400 m2. The prices charged are very little different from our larger stores and this makes our small stores very attractive. : tight assortment and price positioning are our strengths. Our duty is to reach out to small local traders in the highlands, in the gaps, because their role is essential, vital even to contribute to the economic balance of our island while ensuring a decent and sustainable income.
Although Leader Price remained within the Casino fold, has the purchase of the majority of the brand's metropolitan stores by Aldi had an impact on the operation of the brand locally?, between own stores, franchisees and independents ?
We hold the Leader Price and Express franchises for Reunion Island, and if it is true that the map of Leader Price stores in mainland France has changed somewhat, since 700 of the 800 stores were sold to Aldi, it doesn't affect us in any way, because our franchisor still owns the brand, and therefore the Distributor Brand products offered to us. On the contrary, we were even able to add Casino brand products to our shelves and thus increase the assortment offer.
Three years ago, in our columns, you summarize your “soft discount” strategy by developing an offer covering all domestic needs, beyond food, associated with openings and expansions of points of sale, with possibly even additional services, like a snack, where the demand would be felt. Were these projects able to be carried out successfully? ?
This notion of soft discount has allowed us to be in the Top of the preferred distribution brands of Reunion Islanders.. It is a source of great pride and satisfaction for all the teams to have been able to reverse the trend and win back the hearts of customers.. The Leader Price brand follows a path in Reunion that is distinct from that of the mainland Leader Prices.. While remaining true to the general philosophy of low prices, it differs in terms of product assortment, by giving a prominent place to national and local brands. Caillé Grande Distribution has achieved the feat of adapting the Leader Price concept to the Reunion context, giving the brand’s supermarkets their own identity. We offer our customers a mix of low-cost products, of private label products, local products and national brands. We reconcile low prices, quality products and proximity making purchasing easier. But unlike what happens in mainland France, if Leader Price remains a discount brand in Reunion, it has become a supermarket chain like others with an assortment and product positioning corresponding to the expectations of Reunion customers. The fundamental difference between the stores in Réunion and those in Métropole, is that locally we have around 70% local and national products and 30% private label products, whereas in mainland France, Leader Price brand products are in the majority and national or local brand products are in the minority..
Are there any other opening or expansion projects in the pipeline? ?
Our desire is always to develop in different formats : LP Express, and large supermarkets. This month will see the expansion and remodeling of our downtown Saint Denis store, rue Maréchal Leclerc. We are working on the transfer of the Boulevard Bank store in Saint-Pierre to the new Casabona shopping center for the end of the year. These new stores will benefit from innovative concepts in line with customer expectations. : le snacking, organic and thematic areas highlighting fresh products from the market area. The last months of the year will see the opening of a dozen LP Express.
The health crisis has given real impetus to digital in Reunion. In this domain, Promocash, with Promocash.re, and Leader Price with its mobile application found themselves at the forefront of digital information and online ordering. Where are you with your other digital projects? ?
The world is changing at great speed, consumption patterns too, especially for us traders. We must constantly prove to our customers that we are as close as possible to their expectations and be sensors of new trends.. And with the health crisis that we are going through and which lasts, the center of gravity of these trends should change by minimizing contact as much as possible and favoring connected commerce. The digitalization of our communication and services is absolutely vital if we want to personalize customer relations and build loyalty.. It’s about making supermarket shopping as attractive as possible.. To be able to provide the customer with the product they are looking for, at the price he seeks, when he looks for it, and let him know. This is the challenge of a modern image which is based on an assortment that is as appropriate as possible to its needs.. We have set up a new loyalty program, the most generous on the market. Then launched the mobile application on smartphones allowing customers permanent access to the current catalog, to discount coupons, personalized offers, games, gifts, to the electronic wallet.
They can also create a shopping list and access their loyalty account completely.. From now on, no need to present your physical loyalty card at the checkout, it is in the app in a dematerialized way. We apply the same reasoning in our Promocash cash and carry activity., here again to be as close as possible to the requirements of catering professionals. The launch of the Cash@Pro activity, Aircraft orders from Rungis are moving in this direction. Today no one knows exactly how quickly and with what intensity the digital market will deploy., but one thing is sure, we will be present and want to stay ahead to offer these services to our customers. Before the end of 2021, we will have around ten of our Leader Price stores which will offer a Drive service to their customers. The deployment will begin in August and end in December. We are in the process of launching a home delivery service for customers who do not want to come to the store.
The Leader Price de la Montagne store was redone a few months ago. Is this a program to modernize all your stores? ?
One of our projects was to completely redo the interior of our La Montagne store, we were able to carry out the work at the end of 2020 and we should improve the parking in 2022 by increasing the number of our spaces. We will continue to remodel all our stores to offer our customers more attractive environments., more modern with renewed furniture and better adapted to current consumption patterns.
The current generalized increases in production costs are weighing on manufacturers and the latter, in mainland France at least, calls for understanding of mass distribution. However, we are instead witnessing a resumption of the price battle between brands. What is Leader Price Réunion’s position on this situation? ?
Since the beginning of the year, our supplies are terribly affected by increases in raw materials and freight costs not to mention the shortage of containers, loading delays, port congestion, stock shortages, fresh produce DLCs. Overall, we have decided not to pass on the increases to our consumers, except for fresh products imported by air which have suffered a surge in freight prices. To reduce the impact of increases on consumers, we have modified our sourcing in order to seek better pricing conditions in Europe.
During confinement, Promocash has chosen to remain open to healthcare workers. A great proof of solidarity. Or, within the framework of CSR or the mission-driven company, solidarity, as well as the environment, become important issues for companies vis-à-vis their customers. What is your feeling about this evolution of the company's vision and how can it apply to a commercial brand like Leader Price? ?
Through its brands, the Mass Distribution branch of the Caillé Group positions itself as an operator committed to a global environmental and societal approach. Committed to customer relations by developing digital tools that provide information more quickly, to increase their satisfaction, to offer personalized offers and reward their loyalty through a generous and exclusive program. Committed to a sincere environmental approach through waste treatment, optimization of energy consumption, “eating well” for all through product traceability, the democratization of organic, supporting local projects such as the production of “Crazy Bee” peï honey.
With at the heart of our action, the permanent consideration that we operate in a fragile island environment, that it is important to us to protect and ensure protection for the well-being of all. So, Caillé Grande Distribution staff are fully involved each year in World Clean Up Day by devoting time and resources to preserving our environment. The latest alarming report from the IPCC tells us that this month of July was the hottest month on record and the deadliest ever known.. What obliges us, we businesses, to adopt exemplary and virtuous behavior. Our societal commitment is an integral part of the Caillé Group’s DNA.
