As the retail landscape continues to evolve, projections for specialised retail in 2024 are shaped by the experiences of the previous year. Despite a challenging start in January, there are indications of potential recovery in consumer spending, albeit amidst lingering uncertainties influenced by various factors such as housing market tensions, declining birth rates, and potential social movements.
In February, Procos, the representative Federation of specialised trade in France, revealed insights from its analysis of 2023, indicating a 3.5% increase in turnover for specialised stores compared to the previous year. However, the year was marked by distinct phases: a promising start followed by a gradual decline, a notable recovery in mid-year, and a sluggish end with a modest uptick in December. Emmanuel Le Roch, Procos's general delegate, highlights a consumer behaviour pattern characterised by indulgence during the summer, a morale setback at the beginning of the school year, and last-minute spending during the holiday season.
Photo © Stockcube | Dreamstime.com
The non-food retail sector bore the brunt of price hikes in food and basic necessities, leading to constrained budgets for discretionary spending among modest households and heightened concerns over purchasing power for others. Additionally, the crisis in housing construction and sales had a direct impact on home furnishings trade.
Not all sectors within specialised retail experienced uniform performance in 2023. While beauty and perfumery thrived with a 7.9% growth, segments like shoes, clothing, sports, and household appliances witnessed declines. Interestingly, specialised food and catering sectors ended the year on a positive note.
Online retail, while showing marginal growth in revenue, faced challenges from international platforms like Amazon, Shein, and Temu, disrupting markets with aggressive pricing strategies.
January 2024 mirrored the subdued sentiment of the preceding year, with a 1.5% decline compared to January 2023. Sectors like shoes, clothing, sports, and homes continued to struggle, exacerbated by the impact of clearance sales.
Looking ahead to 2024, Procos foresees a transitional phase. While easing food price inflation may offer consumers some respite, the pace of confidence recovery remains uncertain. Factors like European elections and employment trends could further influence consumer sentiment.
A crucial consideration for the French economy is the role of household consumption, which is expected to offset declining investments in 2024. However, the extent to which this will translate into sales of goods versus services and leisure remains to be seen. Additionally, the growing prominence of second-hand goods markets introduces a variable that conventional metrics may not fully capture.
More information:
Procos
www.procos.org