With the onset of the spring/summer selling season, corrective measures at the local level have started to bear fruit in some big markets where Decathlon had suffered setbacks in 2018. Company officials indicate that these measures are bringing its employees closer to local sports users, and that this has led to the return of certain international brands to Decathlon's shelves.
Meanwhile, some local and national entities within the increasingly decentralized French-based retail group have taken some interesting new initiatives on the digital and environmental fronts, and Decathlon has just entered a new market – Algeria.
As reported in February, Decathlon suffered sales declines in France, Italy and Spain in the first part of last year, partly because of a decision at the corporate level to privilege the company's vastly improved offer of private brands. In China, the second-largest market for the chain in terms of the number of stores, sales grew less than before on a comparable store basis (SGI Europe, Vol. 30 n°7+8 of Feb. 19, 2018).
In the end, sales were flat or down by up to 5 percent in all four markets. They declined by 5 percent to €3.14 billion before VAT in the domestic French market, due also in part to the “yellow vests” movement at the end of last year. They also declined in Spain, the second-largest market for the group in terms of revenue, ahead of Italy and China. Decathlon has just announced a 3.3 percent drop in Spain – the first one since 2012 – to €1.57 billion, although online sales rose by 30 percent, representing 6.5 percent of the turnover. The profit fell by 19 percent to €97 million at the national level.
However, a spokesman for Decathlon has just told us that the company enjoyed some growth again in France in the first three months of 2019, as local and regional company leaders had been allowed to order between 7 and 20 percent of their ranges from outside the group, including some locally relevant brands. Decathlon has started negotiating again at group level with big brands like Adidas, while leaving it up to the local organizations to order the desired products and quantities.
The spokesman said that sales were slightly down in China during the first quarter and more or less flat in Spain, but that they were regaining momentum in Italy. He stressed that the group continues to grow strongly in other markets, especially in the Americas, Africa and various Asian countries including Cambodia, Vietnam, the Philippines and Malaysia.
Decathlon's has just entered its 55th market by opening a store of more than 4,000 square meters in Algiers, the capital of Algeria.
