AOL lands £140m French e-tail deal

Suzanna Kerridge, Paris correspondent

Suzanna Kerridge, Paris correspondent

French retail giant Auchan has signed a FF1.5bn (£140m) deal with AOL France to develop the country's latest online shopping service. Claude Palmieri, director general of Auchan Interactive, expects the online service to account for up to five per cent of the company's annual revenue. As the company reported revenues of FF163bn (£15.2bn) last year, Auchandirect.fr could generate as much as FF8.5bn (£795m). The deal gives Auchan an opportunity to develop its ecommerce site, Auchandirect.fr, which will sell over 4,000 commodities including fresh produce, wine and groceries. The service will initially cover the Paris area but is expected to extend its reach over the next two years. AOL will use the deal to publicise its latest unmetered internet access offering by means of the project. Stéphane Treppoz, director general of AOL France, said he hopes to sign up 250,000 subscribers through the Auchan chain of supermarkets. The French hypermarket, which last year sold 130,000 PCs, will offer buyers of PCs a free AOL connection. Other customers will be able to subscribe to AOL's FF99 (£10) unlimited monthly surfing deal. Auchan is the latest in a long line of French retailers to unveil Internet plans. Carrefour, Casino and Galeries Lafayette have all launched services in the last few months. In response to criticism that the company has been slow to announce its ecommerce plans, Palmieri said: "Our philosophy is to communicate actions, not intentions."