Logistics: a growth pillar for Les Mousquetaires

2023 was a great year for Les Mousquetaires, and not only because it coincided with the theatrical release of the two-part adaptation of Alexandre Dumas’s novel, whose second installment ranked second at the French box office last January. For the eponymous group, which includes the Intermarché, Netto, Bricorama and Roady banners—among others—the figures for the latest fiscal year also point to success. The group, which is also in the midst of integrating the Casino-branded supermarkets and hypermarkets into its network, can boast a 10% increase in revenue (excluding fuel) over the past calendar year.

“These overall results cannot be separated from our long-term logistics and supply chain strategy,” says Pierre-Yves Escarpit, CEO of ITM LAI (Intermarché Les Mousquetaires Logistique Alimentaire International), an entity employing more than 8,000 people in France and responsible for delivering food products to the network’s stores. As the CEO of this subsidiary explains, the parent company has chosen a vertically integrated organization and control over every link in its retail supply chain (unlike some competitors). This ranges from managing the logistics real estate portfolio, which the group owns for the most part, to store deliveries, as well as establishing production units (PUs), since Intermarché stands apart from other retail groups through its in-house manufacturing activity, via Agromousquetaire.

More than 2,000 Intermarché and Netto stores are supplied throughout France by the company’s fleet of 2,000 red-and-black-logo semi-trailers. Of ITM LAI’s 30 facilities in mainland France, 23 are operated in-house (accounting for 80% of shipped volumes), representing 1.25 million square meters of group-owned space, in addition to the four facilities of subsidiary ITM LEM (Logistique Equipement de la Maison International, which serves Bricomarché, Bricorama, Brico Cash and Roady stores). “As a result, we do not face the same constraints as a typical investor primarily seeking to maximize the return on an warehouse portfolio,” explains Bénédicte Guilleux, director of Immo Mousquetaires Amont. Our purpose is to create the most functional and efficient real estate infrastructure possible in terms of operating costs, with the ultimate goal of meeting our logistics needs. Everything is designed with our stores and customers in mind.”

In this context, speed and smooth logistics services have logically become key drivers of economic performance, so that investments inherent in such a strategy ultimately create value in French consumers’ shopping carts and translate into additional revenue. Distributing at a lower cost remains the key to selling at a lower price. “Our goal remains to provide our customers with products offering the best freshness, the longest remaining shelf life, and, of course, the best selling price. We therefore need to combine rapid flows with optimized transport costs to meet this challenge,” Pierre-Yves Escarpit emphasizes. An example? Noting that a large share of its PUs were concentrated in the northwestern quarter of the country and remaining true to its logistics approach centered on the geographic midpoint, the group relied on an existing site, transforming it into a performance lever in Noyant-de-Touraine (49). “It is a long-standing facility that has been reorganized, redesigned and reconfigured to become a consolidation hub,” our interviewee explains. It is located very close to a number of fresh-product producers. In particular, it serves our smaller suppliers, enabling us to consolidate flows and then deliver full truckloads to our facilities.” In other words, it optimizes every available cubic meter of container capacity.

Along the same lines, one of the company’s trucks can deliver to a store from an Intermarché facility in the morning, then stop at a production unit on its return journey before serving its home facility. “In a way, we create positive reverse logistics flows and thus minimize the well-known, costly ‘empty miles.’ This is why the geographical location of our production units is part of our transport-optimization thinking,” Pierre-Yves Escarpit says. Moreover, this end-to-end control gives the company a degree of agility that notably enabled it to remain efficient during the pandemic, a period when the logistics sector as a whole was under strain.

For Les Mousquetaires, 2012 (the title of another big-budget film, appropriately enough) marked a turning point. That was the year the Paris-region retailer launched its Logistics Transformation Plan (PTL), whose benefits it is now reaping. The investment? €1.7 billion. “This overhaul and this way of rethinking our logistics would have been more difficult to implement had the real estate not been owned by the group,” notes Bénédicte Guilleux. Twelve years ago, when we needed to adapt our aging logistics operations to the challenges of the time, it was easier to carry out partial renovation work, demolition, reconstruction and modernization at our sites without being subject to contractual constraints with a third-party investor. We saved a great deal of time in making the pivot.” Among the most notable transformations initiated through Les Mousquetaires’ PTL were the construction of a mixed-use facility in Angoulême in 2021, the conversion of the Paris-Melun-Sénart facility into a mixed-use facility (completed in spring 2023), and the introduction of the first non-alcoholic beverage robotics system at its Montbartier facility between 2020 and 2022.

While Les Mousquetaires’ PTL is scheduled to be completed in 2026, its industrial real estate subsidiary continues to look ahead, as the logistics sector is likely to be disrupted again by the issue of land-use restraint, increasingly prominent in public debate and parliament. Although France’s zero net land take policy is set by the Climate and Resilience Act for 2050, the group “will eventually have to begin considering the matter, even though we are still currently able to find land,” Bénédicte Guilleux adds. Zero net land take will require us to consider redeveloping brownfield sites or densifying our existing sites before looking for land to build on. This densification will involve investments in robotics.” Still in keeping with this “green” approach and as part of modernizing its sites, the group is installing solar panels on its warehouses: four buildings already have them, and seven more will be equipped in the coming months.