The French retail and consumer market is undergoing a period of significant realignment, but have the great national traditions of fine food and high-end fashion been affected?
The downfall of the ‘steak frites’ in the face of the competition by the hamburger, already noted in 2014, suggested a tipping point between bistro eating and fast food. In 2016, convenience store fast food grew 76%, largely outpacing any other fast food category. The French appetite for the packaged sandwich or salad is rising rapidly on the back of shorter lunch breaks and more choice of products.
Changes are not confined to out of home habits. 2017 was the first time in five years that sales of cheese declined in France at constant values. Traditional favourites such as Roquefort, Camembert and Blue have been the worst affected, as young consumers exhibit a taste for milder alternatives such as mozzarella and cream soft cheese.
It is in light of such shifts that the intense M&A activity in the French food sector in 2017 should be understood. 67 deals were struck, as many French companies attempt to set their sails to the changing winds of consumer tastes. The year’s largest retail and consumer deal, Danone’s €11.8bn acquisition of US WhiteWave Foods, exemplified the trend. WhiteWave produce dairy alternatives such as Alpro, which saw sales growth of 22% in the UK in 2016.
La nouvelle vogue
France has long been the largest European market for luxury eyewear. High end frames adorn faces and high streets across the country. But recently French consumers have been drastically pairing back on their spectacle spend.
A change in the law around reimbursement precipitated a 7% fall in luxury spectacle sales in 2016, a decline forecast to continue and leave the French luxury eyewear market in third position within Europe by 2020. An example of how simple notions of national ‘tastes’ often blur the true drivers behind consumer behaviour.
The French luxury apparel market has barely budged in a decade, with 0.3% growth recorded since 2014. The UK has managed 12% growth in the same period. The likes of Louis Vuitton and Chanel have struggled to engage new customers at home. It is the value end of the market that has shown promise. Homegrown player Kiabi has struck a chord with its simple ‘la mode à petits prix’ message. Now present in 25 countries, it plans further expansion of its 350 French stores after recording 4.5% sales growth in 2016.
International value retailers smell further opportunity. Primark, which has recently opened 12 stores across the country, reported sales of €406m in 2016, or approximately €35m per store. The company noted that several of its top 20 performing stores by sales density are in France.
The stereotypes that surround French consumers of fine dining and high-end fashion are increasingly ill-fitting. They are searching for convenience, value, and new propositions which fit in with their changing lifestyles.