24 Nov 2015
Retail Reels in Wake of Paris Attacks, though Xmas Rebound Expected
France's retailers pin their hopes on Christmas, Black Friday and e-commerce as consumers rally after November 13.
With Paris still reeling from the attacks of 13 November, consumer activity has understandably gone on the back burner. The city's retail sector, however, remains hopeful that Parisians will not allow themselves to be daunted for long, especially with Christmas barely a month away.
Prior to the attacks, French retailers were anticipating their best Christmas since the 2008 onset of the European debt crisis. According to one study by Deloitte, spending on gift shopping was expected to show a 16% year-on-year rise. Just how the recent terrorist outrages will impact on consumer sentiment, however, remains unclear.
In the immediate aftermaths of the attacks, the streets of Paris were deserted, with residents advised to stay at home. Since then, however, the spirit of the city has begun to reassert itself. With Christmas still a month away – and with many promotional initiatives yet to be launched – there is widespread hope that any lost momentum can still be regained.
The day after the attacks, The National Commercial Centre Council recorded a countrywide average drop of 17.9% drop in the number of retail visits. By the following weekend, the average shortfall was just 10% nationally.
In Paris, though, the drop in retail activity was predictably greater, with the number of shoppers still down by 20% on the weekend after the attacks. According to The Council, shopper numbers are now recovering by around 1% per day.
In terms of specific sectors, the hardest hit seemed to be high-end retailers and department stores. The Avenue de Montaigne, set just off the Champs-Elysées, is home to the French flagship stores of some of the world's most prestigious brands, including Chanel, Dior and LVMH. In the immediate aftermath of the events of 13 November, these outlets were deserted, with luxury shopping clearly off the agenda for many consumers.
With Galerie Lafayette and Printemps, two of the city's leading department stores, recording drops in visitor levels of 30% and 50% respectively, it was largely only Chinese tourists who kept the tills ringing. Commenting on the willingness of such visitors to carry on spending, one member of staff at Galerie Lafayette said: "The Chinese people, they fear nothing."
Elsewhere, the news was less optimistic. The country's National Clothing Federation, which represents 50,000 independent fashion boutiques across France, reported a 20-30% drop in visitors in city-centres. In the case of JouéClub, one of the country's leading toy retailers, the drop was even more dramatic, with sales down by 60% over the first weekend and staying low the following week.
The consumer electronics market, however, seemed to rally a little more quickly. While Darty, the country's leading retailer in the sector, saw a 50% drop the day after the attacks, footfall quickly recovered in the following days.
Now many retailers are pinning their hopes on the looming Black Friday event (variously rebranded as "Le Grand Week-end" or "Crazy Week-end" for French consumers). With the event scheduled to kick off this Friday (27 November), many of the country's leading retailers – including Auchan, Carrefour and Fnac are already committed to taking part. The event will also be supported online, courtesy of Amazon and La Redoute.
With discounts ranging from 10-50%, the Black Friday concept was first imported from the US back in 2012, with Fnac leading the way. Just three years on, it has now become a staple of the French retail scene.
In terms e-commerce, it is thought that this is one sector that could actually benefit from the attacks. Earlier this year, France's festive online spending had been expected to grow from €11 billion last year to €13 billion, with Christmas sales representing some 25% of total annual e-commerce turnover.
With heavy security measures now in place in shopping centres and other public spaces and consumers understandably wary of repeated attacks, it could well be that e-commerce growth will exceed the earlier expectations.
Eugene Leung, Paris Office