Falling prices of goods has driven consumption in France since 2001. Headline inflation over the time period has averaged about 2% but this has been made up of spiralling energy and property prices but ever lower prices of food, clothing and consumer durables.
A recent survey by the French leader of consumer credit finance, Cetelem, highlights how the French have “discovered” low-cost shopping: 72% of those surveyed said they have shopped at low-cost supermarkets (hard-discounters) while 28% said they bought all their provisions at hard-discounters. On the flipside however, consumers have been willing to spend more on internet access, telephony and TV services.
Most revealing, the survey highlights how consumer segmentation by price is no longer applicable for numerous products. The same people are buying low-cost and top-of-the–range goods. For example, 45% of those surveyed buy home-improvement products in low-cost stores while 66% buy electrical (TV, Hi-Fi, IT) products at discounters.
The French are increasingly turning to the internet and the percentage of on-line buyers is now higher in France that in other European countries (see chart below). Typically, French consumers consult the internet either to compare prices or to buy on-line after seeking advice from specialist retailers.
On-Line Purchases in 2005
French Consumer
Average European Consumer
Cultural Goods
38%
26%
Leisure-Travel
30%
22%
Electrical Goods
16%
15%
DIY Goods
7%
5%
Financial Products
5%
5%
Furniture
5%
5%
Food
4%
4%
New cars
1%
3%
Address: IBT Partners - 17 rue du Colisée - 75008 Paris - France
Falling prices of goods has driven consumption in France since 2001. Headline inflation over the time period has averaged about 2% but this has been made up of spiralling energy and property prices but ever lower prices of food, clothing and consumer durables.