Market leadership in France is poised to change hands for the first time in a generation. Independent operator Leclerc is poised to overtake rival Carrefour later this year.

Carrefour is feeling the squeeze from arch-rival hypermarket Leclerc

Market leadership in France is poised to change hands for the first time in a generation. Independent operator Leclerc is poised to overtake rival Carrefour later this year.

For 2013, Leclerc reported sales, excluding petrol, of €36.5bn (£29.9bn), representing growth of 4.7%. Although that eclipsed the growth of its rivals - Carrefour posted relatively meagre growth of 1% in 2013 - Leclerc nevertheless presented a subdued outlook for 2014. The retailer anticipates that sales this year will increase by between 3.5% and 4%, in line with earlier forecasts but below the 7% high water mark of 2012.

The Drive click-and-collect format is one of the key drivers of Leclerc’s growth. In 2013, Drive contributed 36% to Leclerc’s overall sales growth, with an upsurge in customer traffic of some 412,000 households.

Of Leclerc’s 2013 growth, 12% came from non-food specialist stores, which now account for 10% of overall domestic sales. Whereas Leclerc’s hypermarket rivals are questioning the future of their struggling non-food departments, Leclerc believes “access to an expert offer” at attractive prices will generate further growth.

Healthcare is a key area of focus, following the move into optical products in 2012. Leclerc plans to sell over-the-counter medicines in its stores, with the aim of undercutting traditional pharmacies by 25% to 30%. The retailer is targeting revenues of €200m (£164m) from its healthcare business.

Likewise, it is to continue to invest in its Espaces Culturels entertainment departments, to the tune of €150m (£123m) over the next three years. Although the market for CDs, DVDs, books and consumer electronics decreased by 6% in France last year, turnover at Leclerc’s Espaces Culturels increased by 5% to €461m (£378m), making it the second-largest entertainment retailer behind Fnac. Leclerc operates 215 Espaces Culturels, but 90% are in cities of fewer than 80,000 inhabitants, where competitors have little or no presence.

Leclerc’s main competitive weapon continues to be price but its everyday low pricing position is under renewed pressure from Carrefour and Casino - despite its slower pace of sales growth, the former is now achieving positive traffic trends at its hypermarkets and Casino is fighting back through ambitious price cuts at its Géant hypermarket division.

Leclerc may be poised to assume market leadership, but it will have to rely on appeal other than price if it is to consolidate its position.