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Elo/Auchan (ELOFR; NR, BB+ Stable); beware the French read-through

CONSUMER STAPLES
  • We would not completely ignore read-through to Carrefour; as we said it had to discount -10% this half to hold onto market share and clearly Auchan has suffered by not taking that aggressive pricing approach.
  • Carrefour is offsetting that for now (impressively) by cost savings. But together it continues to point to intense competition in the French Food market.
  • The read-through to ITM Enterprises 29s, a bond we refrained from taking a view on at issuance given lack of reporting detail, is not great either.
  • Auchan we bucket with ITM after this morning - we don't take views on co's that don't report results clearly in a public forum.

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