The spectacular growth of discount retailer Action appears to have reached its peak. The British private-equity firm has warned, in its half-year results, that growth forecasts may need to be downgraded, mainly due to disappointing performance in France.
3i entered Action in 2011, when it was still a modest Dutch chain with around 250 stores. Today, the discounter has more than 3,000 outlets across Europe and has become 3i's most important investment, accounting for roughly 70% of its portfolio. Action's valuation rose to €40 billion, delivering 3i a share price gain of more than 1,300% in 14 years.
In 2024, 3i increased its stake in Action to 62.3% through a share swap with Singapore's sovereign wealth fund GIC and a share buyback. With that move, the investor doubled down on further expansion.
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However, Action's latest figures show a clear slowdown in growth. In the first nine months of the year, revenue rose by 17.4% to €11.2 billion. That increase is largely driven by new store openings. Comparable sales grew by just 6.3%—an unusually low figure for Action. Consumer spending in France, which accounts for one-third of revenue, has been particularly weak.
The deteriorating sentiment among French households is putting pressure on profit expectations. 3i warns that its previously issued growth forecast of 6.1% may be too optimistic if the trend continues. Analysts also note that Action's performance is beginning to normalise relative to its competitors.
The chain continues to expand rapidly, attracting more than twenty million customers weekly and remaining appealing thanks to low prices and an increasingly international assortment. In the third quarter, it continued its European expansion with the opening of its first stores in Romania. In the first nine months of the year, a total of 221 stores were added, bringing the network to 3,139 stores across fourteen European countries.
The first Romanian store opened in September, and four more have been added since. Romania is now the 14th European market in which Action operates. The company says it remains on track to open about 380 new stores across Europe in 2025.
The expansion is progressing as planned, and both 3i and market watchers still see room for growth in new markets.
Action's growth slowdown is not a sign of weakness but of maturity. The formula remains strong, but the era of extreme expansion is fading. For 3i, this marks a new phase: becoming less dependent on a single success story and investing in further innovation within the chain. Action will now need to prove its strength through stability and efficiency—not just through the sheer number of new stores.
Source: LinkedIn Dirk Mulder
