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France's Discount King's Hypermarkets, Other Businesses Cause Uproar

March 28, 1985|United Press International

PARIS — France's latest hero is a small town businessman who has revolutionized French retailing by introducing big business at rock-bottom prices on everything from food and taxis to funerals and gasoline.

Edouard Leclerc, the "discount king" of France, has wrecked centuries-old government and professional monopolies. His every move into a market causes riots from disgruntled competitors, lawsuits from monopolists, front pages in newspapers and mobs of happy consumers.

He has become a legend.

French Tradition

Since the 17th Century when Jean-Baptiste Colbert became Louis XIV's finance minister, the French tradition had been small firms offering a limited range of goods at astronomical prices.

"For centuries the French have been protectionist with competition and imports banned by law," mused Leclerc, a pleasant, homey 58-year-old in a rumpled sweater and gray suit. "France has been dominated by professions--butchers, bakers, pharmacists, just like the Middle Ages."

He began to rip into this tradition in 1949, when he opened two small-town food stores in his native Brittany in northern France. Leclerc imitated America's Henry Ford.

"He always said, 'My employees must be able to buy my cars.' Ford sold at the lowest price possible."

This "moral philosophy," he said, prompted him to sell milk more cheaply than other Brittany stores in 1953. Farmers rioted but he convinced them he could sell more milk than other shops.

An anti-unionist, his policy became low salary with higher purchasing power. "One can buy more with the same salary," he keeps saying quietly.

Markets Mushroomed

In the 1960s, he opened supermarkets. By the 1980s they "mushroomed across France" to total 460 "hypermarkets," selling not just food but furniture, clothing and hardware. As for prices--cat food at 2.80 francs compared to 5.30 francs at a neighborhood shop.

Then Leclerc tackled other markets, each battle making the front pages, the law courts, the riot police.

He and son Michel have been summoned to court some 300 times.

In one of the latest tussles, pharmacists in Montaigu in central France sued Michel's new "para-pharmacy" for selling suntan oil, diet candy and other items considered the sole preserve of pharmacies.

The Finance Ministry--which Leclerc's Paris office ironically overlooks--is studying whether his hypermarkets can sell big-name cosmetics and perfumes, now the exclusive domain of cosmetic shops.

A company with a nationwide monopoly in funerals is suing Michel Leclerc funeral homes where one can die at a discount. But a bill is about to be passed in parliament outlawing funeral monopolies, another Leclerc victory.

Leclerc moved on to battle the government of France by breaking legally established prices on books and gasoline.

An international court in Luxembourg finally ruled in favor of the French law that fixes book prices to protect publishers.

------------------ But the same court also said Leclerc must be allowed to sell discount gasoline.

Full-page newspaper ads the next day proclaimed, "Long Live the Liberation by the Troops of Edouard Leclerc."

Next, the folksy Leclerc enters the ring to sell cigarettes, a government monopoly.

"The cigarette monopoly violates the Treaty of Rome (that set up the Common Market in Europe) that says no more state monopolies," he said, a twinkle in his eye.

He shrugs off critics who say he ruins worthy small shops and quality goods.

"You can't prevent progress," he said. "Milk used to be delivered to your home, an agreeable life, but one must live in the present."

Put Up Billboards

He also single-handedly scarred the beautiful, storybook French countryside with garish blue and red billboards blaring his slogan, "Leclerc Smashes Prices." Now other supermarkets have worsened the damage.

Leclerc staunchly opposes France's Socialist regime. When national austerity politics created a new class of chronic poverty labeled "the new poor," Leclerc hypermarkets passed out free food.

"Socialism means you share poverty, not the wealth," he said with a bitter smile.

Leclerc remains a modest man. The 460 Leclerc hypermarkets are licensed to independent operators, linked by computers to his Paris headquarters that selects their products.

The licensees must join the "Leclerc Moral Movement," pay 25% of before-tax profits to employees as a bonus, keep profit margins to 14% and pay him 2.50 francs for each 10,000 francs of profit.

Each licensee can own only two Leclerc hypermarkets. The discount king himself owns only his original two.

Leclerc claims he prefers to see people buying happily at low prices than to live the life of a millionaire.

"When a man has a beautiful woman in his arms, his pleasure is regarding the pleasure of the other," he intoned, leaning across his desk. "It's the happiness of others that is the most agreeable.

"The time you are on earth is not long. Whether one is rich or not rich, you die anyway."

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