Metro, Auchan, Spar… pressure is tightening on the Russian footprint
Retailers that continue operating in Russia emphasise responsibility as employers, but are nevertheless facing growing criticism. This is a dilemma for retail multinationals, which are also threatened with nationalisation by Russia if they leave the country.
Article written by Nathalie Tran and Sophie Baqué
Following the bombing by the Russian army of a Leroy Merlin store in the north of Kiev, which caused the death of at least 8 people (source: Ukrainian General Prosecutor’s Office), the Ukrainian employees of the company launched a petition on 21st March. They are asking Adeo and AFM (Association Familiale Mulliez, owner of Adeo among others) to cease trading in Russia.
The AFM has 77,500 staff in Russia, half of a French contingent. “We vigorously demand that Adeo and AFM cease their activities in Russia, which will deprive the aggressor of the opportunity to finance the Russian offensive in Ukraine”, the petition states. The petition gathered 16,200 signatures 5 days after launch. While Ikea, Couche Tard (38 food stores), McDonald’s (850 restaurants in Russia), Starbucks and Decathlon announced departure from Russia, there is growing criticism of those who continue to operate there. This is also the case for the German wholesale retailer Metro (93 cash & carry stores in Russia, turnover of €2.4 billion in 2021) and for the Dutch company Spar.
Readers will recall that as of December 2021, Auchan Retail operated 231 stores in Russia (including 107 hypermarkets) for an annual turnover of €3.2 billion. This is more than 10% of worldwide sales. For Leroy Merlin, Russia generated a turnover of €4.2 billion in 2020, i.e., 18% of total sales. In Russia, Moscow is considering legislative measures to dissuade Western companies from leaving. A draft law, in the process of voting, appoints “external” Directors into Western companies that have left Russia. Amongst possible measures are a variant of the accelerated bankruptcy procedure for foreign companies closing down production in Russia and a scenario for the nationalisation of the assets of Western companies closing their operations.
Read more : Russia looks East to replace Western retailers (March 22)