ITM Entreprises SA - Company Profile, Information, Business Description, History, Background Information on ITM Entreprises SA

24 rue Auguste Chadrieres
65737 Paris Cedex 5

Company Perspectives:

Since its creation, the Groupement des Mousquetaires has developed eleven store formats while respecting three fundamental principles: maintaining a practice of low prices by controlling the costs of distribution and searching for the shortest routes between producer and consumer; proximity, through the opening of retail stores in the towns, the countryside and the most isolated villages; human size, as each store is managed by a member who is both a specialist in the industry and close to the consumer.

History of ITM Entreprises SA

ITM Entreprises SA is France's largest supermarket group, with more than 2,700 stores under some 11 formats throughout the country. The company, led by its 'Groupement des Mousquetaires' (Musketeers group) through the Société Civil des Mousquetaires, is also one of Europe's largest retailers, with more than 200 additional stores in Spain, Belgium, Germany, Portugal, Italy, and Poland. ITM Entreprises also holds 51 percent of Intercontessa, the 75 percent holder of Germany's SPAR supermarket chain, adding another 2,000 stores to the group's operations. Not including SPAR, the company's operations generate roughly FFr 250 billion in revenues each year. ITM Entreprises and Groupement des Mousquetaires represent Europe's largest consortium of independent merchants. Each of the company's retail stores are owned by more than 2,400 managers, who benefit from the group's buying power and highly developed distribution network, while 'donating' some one-third of their time to performing administrative tasks for the group. The company's flagship Intermarché supermarket format, launched in 1969, has been joined by a variety of other formats, including the do-it-yourself (DIY) concepts Bricomarché and Logimarché; the restaurant group Restaumarché; automotive parts and service network Stationmarché; the ultradiscount chain CDM; clothing merchants Vetimarché; and two formats targeting especially France's rural consumers, Ecomarché and the Relais des Mousquetaires, the latter located exclusively in isolated villages with no other local source of retail food services. A private cooperative, ITM Entreprises is led by Pierre Gourgeon, hand-picked successor to founder Jean-Pierre Le Roch.

Founding a Supermarket Giant in the 1960s

Intermarché, the Société Civil des Mousquetaires, and ITM Entreprises were founded by Breton Jean-Pierre Le Roch in 1969. Le Roch had formerly owned and operated a supermarket as part of the E. Leclerc supermarket cooperative. A scission between Le Roch, together with some 95 other Leclerc supermarket owner-operators, and the rest of the Leclerc group led Le Roch to quit that group and found his own supermarket empire. Initially known as the 'Ex-Entreprise,' the new company quickly adopted a new name--Intermarché--and a new group identity, borrowed from the Three Musketeers.

In less than 30 years, the company counted more than 2,400 Musketeers. Le Roch set out to build a company with a difference. The Intermarché chain was to be an independent grouping of owner-operators. Each store owner agreed to make all of his stores purchases through the Intermarché chain, which also directed the group's signage, store format, advertising, and other administrative details. At the same time, the store owners--who remained solely responsible for their own businesses, including incurring all financial risk--agreed to 'donate' one-third of their professional time to performing administrative duties for the entire group. In this way, Le Roch hoped to form what the company called a 'Society of Trust,' building a group identity among businesspeople who retained a spirit of independence.

The purchasing power of the new company quickly enabled Intermarché to make a mark on the French consumer. The Intermarché format featured mid-sized stores of some 1,600 square meters, devoted primarily to grocery items. Despite the rising success of the newer 'hypermarket' format promoted by E. Leclerc, Carrefour, and others, which added a department store concept to the traditional grocery store, the smaller Intermarché gained a strong share of the French consumer market.

The success of the Intermarché concept led the group to develop other retail store formats based on the same 'Society of Trust' concept. In 1979, ITM Entreprises debuted the first of its new formats, Bricomarché. This new format added hardware supplies for the growing French DIY market. Bricomarché became one of the generators for the growth of the DIY market in France--which grew from less than one quarter of the population at the beginning of the 1970s to more than 70 percent by the late 1990s, including some 40 percent of the female population. Like the Intermarché chain, Bricomarché went on to dominate the French DIY scene, building up a network of more than 430 retail stores in France by the end of the century, becoming the largest network of independent DIY store operators.

By sharing the Musketeers logo, as well as an extensive logistics network, which grew to include a fleet of more than 1,800 semi-trailers, as well as a company-owned fleet of fishing vessels, Intermarché and Bricomarché enabled their growing networks of owner-operators to offer competitive prices to counter the rising market shares of the hypermarket groups. ITM Entreprises also continued to expand the '-marché' concept, adding the first Restaumarché in 1980. As opposed to the growing numbers of cafeterias attached to the hypermarkets, the Restaumarché concept offered a traditional restaurant ambiance, complete with table service, while also emphasizing speed of service. At the same time, the restaurants' food purchases, made through ITM Entreprises' distribution and logistics networks, enabled each Restaumarché to offer menus at prices significantly lower than other traditional restaurants.

Two years later saw the opening of another store format, Stationmarch√©, devoted to the market for automotive services. Offering a selection of parts and accessories, the Stationmarch√© concept also offered a wide range of repairs and services, including car inspections. The Stationmarch√© concept grew to more than 150 centers through the 1990s, and continued to represent one of ITM Entreprises' fastest-growing markets. The diversification of the company had already led ITM Entreprises to begin grouping its different formats in close proximity to each other, encouraging consumers to remain within the Musketeers Group for most of their purchases. In 1979, the company launched the 'March√© des Mousquetaires' concept, in which a minimum of two separate and distinct stores--of which one was an Intermarch√©&mdash⁄ared a common terrain. The March√© concept was expanded to include each of the company's new formats in turn, building up a network of more than 400 March√©s by the end of the 1990s.

French Retail Leader in the 1990s

The continued growth of the Intermarché network helped boost ITM Entreprises to the leading ranks of French retailers. In 1986, the company added to its diversified operations with the launch of two new store formats: Vetimarché and Ecomarché. The Vetimarché store format was devoted to clothing, yet benefited by being located next to existing Intermarchés. Ecomarché was a supermarket format developed specifically for the rural consumer market, with stores of just 400 square meters receiving daily deliveries from the ITM Entreprises distribution network, while maintaining the same prices as the larger Intermarché stores.

In 1988, ITM Entreprises launched another store format, Procomarché, a cash and carry concept designed to compete with the rising tide of convenience store sales in France. This new format, however, proved a rare failure for the group, as the company found itself unable to compete with such market heavyweights as Metro. The Procomarché concept was abandoned in 2000. More successful for the group was its first moves onto the international market, with the opening of its first Spanish Intermarché in 1988.

At the beginning of the 1990s, ITM Entreprises responded to another growing retail threat--the downturn in the French and European economies had led to the creation and rapid success of a new form of retail store, the deep discounter. As French consumers rushed to this new breed of retailer, including Aldi, Lidl, Norma, and Leader Price, traditional supermarkets and hypermarkets quickly saw their sales decline. ITM Entreprises' response was to create its own chain of deep discount stores, CDM, acronym for 'Comment Depenser Moins' (How to Spend Less). ITM Entreprises deep discount formula included a relatively large range of product categories, but with limited depth, with most products represented by a single ultra-low-priced brand. The CDM format gained quick acceptance from the French consumer, boosting its numbers to more than 200 stores by the end of the decade.

The CDM launch was accompanied by further international growth, as ITM Entreprises moved into the Belgian and Portuguese markets in 1991. The latter country proved particularly receptive to the Musketeer concept, becoming the company's most important foreign market by mid-decade. The group's Belgian, Spanish, and Portuguese members were joined by another European market, Italy, in 1993.

Back in France, ITM Entreprises continued to seek out new retail niches. In 1991, the company launched a new format, the Relais des Mousquetaires. The success of the hypermarché and the growth of large-scale retail parks had forced many small merchants--especially merchants serving France's smallest villages--out of business. By the beginning of the 1990s, it was not uncommon for many of these villages, with populations as little as 500 people, to have lost all of their local retailers. The Relais format was launched to fill this gap--the tiny Relais stores were joined to the distribution and logistics networks serving the closest Intermarché and Ecomarché stores, thereby allowing the Relais owner-operators to offer their local customers competitive prices. The Relais formula proved so successful that the company counted nearly 700 by the beginning of the new century.

Laws governing the retail market in France--regulations designed to protect the country's smaller merchants against their more powerful competitors--made the opening of new supermarkets in the country more and more difficult. The tightening conditions forced Intermarché, which by the mid-1990s had gained a firm lead as the country's dominant supermarket group, to look toward boosting its international operations. As such the company strengthened its operations in Portugal through the opening of a distribution base in Alcanena. This new center served to support as well the launch of the Ecomarché concept in Portugal. Another foreign distribution and logistics base was opened in Villers Le Bouillet, in order to support the company's growing Belgian operations. The company's also opened a distribution center in Poznan to support its entry into the Polish market.

Support for the euro currency, and tightening building restrictions in many of the European Union's markets saw the beginnings of a wave of consolidations among European supermarket and department store groups. The impending entry of U.S. retailing giant Wal-Mart into the European market added further impetus to the round of mergers and acquisitions sweeping through the industry. ITM Entreprises reacted by joining the bandwagon--in 1996 the company bought 51 percent of Intercontessa, a holding company based in Switzerland set up by ITM Entreprises and its partners in order to acquire a 75 percent stake in Germany's giant SPAR Handels AG. The purchase of SPAR, which boosted the company to the number two position in Germany, gave ITM boardroom control of SPAR's more than 525 supermarkets, 3,250 small groceries, and 775 deep discount stores, and added SPAR's FFr 75 billion in annual revenues.

ITM Entreprises next began to eye the vast North American market. In 1997, the company acquired a 17 percent share in Quebec's Rona Inc. and its chain of DIY stores. Meanwhile, the company continued to eye expansion in Europe, exporting the Bricomarché format for the first time, with the first store opening in Belgium. At the same time, the company opened the first of its Intermarché stores in Poland. That market proved a welcoming one for the company, and by the end of the decade more than 28 Intermarchés had opened across Poland.

Jean-Pierre Le Roch retired at the age of 65, picking Pierre Gourgeon as his successor. Gourgeon himself came from the ranks of the company's Musketeers, retaining ownership of his own two Intermarché stores while taking over the leadership of the group. In 1998, the company celebrated the opening of its 400th Bricomarché, while the group of Intermarché stores neared 1,650. The company also launched its first new store format in nearly a decade, that of Logimarché. A small-store format of just 449 square meters, the Logimarché combined DIY goods with gardening supplies, targeting specifically the rural and semi-rural markets.

By 1999, ITM Entreprises presided over France's dominant retail group, with sales exceeding FFr 240 billion, which also earned it a position as one of the world's largest privately owned companies. That year, however, saw the emergence of a new French retailing powerhouse, when the Carrefour group acquired Promodes, challenging ITM Entreprises in most of its market segments. Yet the Intermarché format was viewed as aging by the French consumer, and the company found itself hard-pressed to retain its more than 15 percent market share in its home market.

In response, the company set to work rejuvenating its image, and especially subjecting the Intermarché store format to a thorough revision. The new Intermarché store, unveiled in 1999, placed a larger emphasis on fresh food items. The company expected to roll out the new store concept to the majority of the Intermarché group with the start of the new century. At the same time, ITM Entreprises stepped up its foreign expansion, seeking to establish itself as one of Europe's major retail groups, including entry into the new market of Sarajevo, in former Yugoslavia, where the company launched the new cash-and-carry format InterEx. Meanwhile, the company's SPAR acquisition seemed to turn sour, as that group posted its first-ever losses in 1999.

Despite the failure of the Procomarché format, which was abandoned in mid-2000, ITM Entreprises entered the new century celebrating more than 30 years of retail success. As the company forecast its interest in entering the U.S. market, it also remained committed to maintaining its status as one of the world's leading independent retailing groups. Yet ITM Entreprises also suggested it would be interested in a future merger with another large French group--with potential partners including the E. Leclerc hypermarket chain.

Principal Subsidiaries: Intercontessa AG (Germany; 51%); Spar Handel AG (Germany; 75%).

Principal Competitors: Auchan; Carrefour SA; Casino Guichard; Castorama; Delhaize; E. Leclerc; Guyenne et Gascogne; Koninklijke Ahold N.V.; Lidl & Schwarz Stiftung; METRO AG; Pinault-Printemps-Redoute SA.


Additional Details

Further Reference

Boileau, Nicolas, 'Interview: Pierre Bourgeon, président du Groupe Intermarché,' Nouvel Ouest, December 26, 1999, p. 64.Gay, Pierre-Angel, 'Pour ses trente ans, Intermarché se voit rattrapé par la concurrence,' Les Echos, September 21, 1999, p. 22.Legrand, Constance, 'Intermarché se singularise pour refraichir une image jugée vieillotte,' Les Echos, April 11, 1999, p. 66.------, 'French-Led Group Buys Germany's SPAR Retail Chain,' European Report, January 5, 1996.Secher, Raynal, De l'exil aux mousquetaires, Paris: ERS, 1996.

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