Auchan is planning to transform an existing 9,000 sq.m hypermarket in Mulhouse, eastern France, into a discount outlet trading under the new Priba by Auchan name.

It is not clear if this move marks a turning point in its strategy and a shift towards a greater discount offering. A spokesman claimed the reason of conversion was to respond to the underperformance of the store and if succesful they may try the same model in other areas.

The discount hypermarket is scheduled to open by early April. It will be 100% self-service and offer a range of 25,000-30,000 different products, compared to around 65,000 in a traditional hypermarket. "There will be a bigger proportion of low-price and retailers’ own brands on sale and more bulk buying food options available but national brands will continue to be on the shelves,” the spokesperson revealed.

This move marks two things, one is that the discount hype is gaining a new momentum and  goes out of Aldi style small in-city stores to a larger size and secondly the private label market will grow faster if this new approach spreads to other retailers.I believe these are expected outcomes of the change in shopper attitutes appeared with the economic downturn. Certainly branders will be squeezed between low priced high quality own brands and  thightened margins and  reduced advertising budgets.

2010 will be an interesting year!...