Capitalism with a heart: the Freddie Laker of France stirs up shopping tradition
Imagine a French Freddie Laker and you have met Edouard Leclerc. Like the English entrepreneur, he has made himself into a folk hero by selling at discount prices. But Leclerc does not merely sell airline tickets, he offers everything from books to toothpaste.Skip to next paragraph
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And unlike the bankrupt Laker Airways, Leclerc's consumer crusade has succeeded. Almost single-handedly, he has moved France in one leap from the little corner grocery store to the biggest supermarkets in Europe.
Along the way, he has made many enemies. This year, he has made headlines by infuriating his most powerful possible opponent, the government. The Finance Ministry has barred Leclerc from selling gasoline 20 centimes (about 21/2 cents) cheaper than the state-decreed minimum. Leclerc has not backed down. He has taken his battle to court - and won the first decisions.
For all his hard business style, Leclerc holds a typical French distrust of unbridled capitalism. Profits do not motivate him. Religion does.
Young Edouard, born into a religious Breton family of 11, was destined for the priesthood. But in 1949, after 10 years in Jesuit seminaries, he left to break what he calls the wicked monopolists, the small shopkeepers who formed cartels and fixed prices at 50 percent markups.
''I wanted to put my faith to action,'' he says. ''I had learned a lot about the distribution of loaves and fishes - and how to chase the merchants from the temple.''
Nearly 35 years later, Leclerc retains the air of a country priest. At his small office in central Paris near the former market, Les Halles, he seems uncomfortable in his cheap-looking blue suit. A shock of jet-black hair falls haphazardly over his badly shaven face.
It is no surprise that Leclerc's critics deride him as a crank and a windbag. When he opened his first store in his home town of Landernaeu, offering only biscuits in a run-down atmosphere, competitors laughed. Crazy amateur, they said.
But consumers flocked to Leclerc's store to buy biscuits at a 25 percent discount. Rival tradesmen declared war. They persuaded manufacturers and wholesalers to boycott him, and only a ministerial decree in 1954 reasserting the illegality of fixed prices and supply boycotts saved Leclerc from bankruptcy.
Leclerc then took his campaign nationwide, meeting fierce resistance as small tradesmen took to the streets. But he kept offering more products and opening more stores. Today, he is the No. 1 retailer in France, with an empire of 450 stores.
Still, Leclerc runs no ordinary capitalist enterprise. He owns only two stores. The rest are owned individually. No franchise charge is demanded. Instead, each new member must sign a ''moral contract,'' promising not to raise margins beyond an average of only 14 percent. Members also promise to give a quarter of their pretax profits to workers.
''I play by the rules of capitalism,'' Leclerc says. ''But I have invented a capitalism that includes the heart.''
Small shopkeepers disagree. They see Leclerc as a ruthless vulture. Indeed, in moving France from reliance on corner shops to shopping centers, more than 200,000 tradesmen have been forced out of business.
''We must modernize,'' admits Dominique Barbey, secretary general of the Confederation General des Petites et Moyennes Entreprises. ''But it isn't in the interest of the consumer to destroy all small businessmen.''
Take the nation's small gas stations. Barbey argues that if Leclerc is allowed to charge less for gas, many of them will go out of business. Beyond the owner's personal tragedy, she says drivers may have to drive an untold number of extra miles before being able to fill their tanks.
Leclerc and his supporters think this is rubbish. France's small shopkeeper class is oversized and overprotected, they argue, and only the pressure of competition will force it to enter the modern world.
''The general public interest must win,'' Leclerc says, ''not small private interests.''