Frankrijk

No free fall for retailing despite the recession
While 2008 was already a difficult year due to the credit crunch, the situation in retailing worsened in 2009 as the economic crisis took hold. The drop in GDP growth, the sudden rise in unemployment and a drastic fall in consumer confidence resulted in both perceived and real reduced purchasing power in 2009. However, maybe because recession was less damaging than in many other European countries or thanks to a series of measures by the French government, retailing sales in current value terms remained rather stable in 2009. Growth was also supported by sales of grocery retailers, which outperformed non-grocery retailing in 2009, and mainly internet retailing, which became increasingly popular.

French consumers focus on the best offer and convenience
More than ever, French consumers have paid more attention to obtaining good quality products for lower prices and to forego some non-essential purchases. Clothing and footwear and beauty specialists were among the main victims of this trend. Meanwhile, the French appreciated the discounters’ lower prices and have been more willing to buy private label instead of branded products if the quality is the same. Private label is well established in grocery retailers, but is also gaining a strong presence in furniture stores, such as Ikea, and in the beauty category, where Sephora offers a large range of private label products. Apart from price, proximity and convenience were among the major needs of French consumers. Thus, customer services further developed in 2009. Owing to their proximity, supermarkets performed slightly better than hypermarkets, which were perceived as more expensive and less convivial.

Competitive environment redefined in 2009
2009 was a merciless year for retailers. The most important companies (with several billion euros in sales) were better cushioned against the recession than small to mid-sized players, mainly if they could be also flexible like Intermarché, Leclerc or Système U. A simple positioning like for Aldi, which remained loyal to its hard discounter’s image, still paid off. Chains such as But or Conforama suffered from their old-fashioned image in comparison with the brand equity of Ikea. Due to its focus on hypermarkets and its image of relatively higher prices, Carrefour posted one of the most disappointing performances in 2009.

Internet retailing continues its strong progress
Non-store retailing easily outperformed store-based retailing in 2009 by virtue of the ongoing impressive double-digit value growth of internet retailing. Now well established in French consumer habits, this alternative channel was perceived as the best place to find good bargains (thanks to almost permanent ‘sales’) and was perfectly suited to the growing hectic lifestyles of the French. Internet retailers have reassured consumers by improving payment security. In addition, virtual stores provide the same services as bricks and mortar stores, like delivery and after-sales services. Internet retailing is appreciated for its convenience and round-the-clock availability. Store-based retailers increasingly saw that they had to be present through an e-commerce website in order to keep their customers and attract new ones.

Complete recovery is not imminent
All sources concur that it will take some time before French people have the comfort of increasing purchasing power. Many categories will continue to suffer in the short term, such as audio-visual stores or clothing and footwear specialists. Nonetheless, the market is likely to see sales slightly grow during the forecast period. This should be concomitant with the ongoing dynamism of internet retailing or discounters, for instance, but also the impact of the latest measures by the government to revive the French economy, including the “law for the modernisation of the economy”, or the opening of stores on Sundays.

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