Retail & distribution

Introduction Distance Selling/Catalogue Selling in Europe Profile of the French Consumer Direct selling in France Online selling in France Good news for suppliers to French hypermarkets Department stores in France La Poste Consumption trends Hard discount stores in France

Consumers in France continue to defy analysts’ predictions as, notwithstanding political uncertainty and anaemic growth, the French are still on a shopping spree. First quarter 2007 saw consumer spending up 2.1% on a year-on-year, adjusted basis. This compares to market estimates of +1.4%.  Annualised, this 1Q07 figure translates into a jump of 8% - which is clearly not a sustainable rate. Consumption was driven by a 12% surge in durable goods, especially of household equipment but with the notable exception of automobiles. The table below lists the key elements.

Household Consumption in March 2007

Year-on-year % change (seasonally adjusted)

Manufactured goods	+6.3%
Durable Goods	+12%
Of Which: Automobile	-1.3%
Househould Equipment	+20.4%
Textile / Leather	+3.2%
Other Products	+1.3%

Source: INSEE

Consumers saved the French economy in 2006 with annual consumption rising by 2.7%, following an increase in purchasing power of 2.8% last year. Economists are looking for a similar pattern in 2007 although wary French households are quick to top up any dips in their household saving ratios. After stabilising in 2006, the savings ratio regained its mid 2005 levels of around 15.7%. The key unknown remains the property sector. The latest figures for new housing starts are poor and should have a knock-on effect on household consumption, although the property sector as a whole remains robust.