In 2024, the specialised retail sector in France showed modest growth, with store sales rising by 1.1%, following a stronger increase of 3.5% in 2023. However, this growth lagged behind inflation, which was at 2.4% for the year. Factors such as lower sales volumes and a preference for cheaper products, including private-label items and discount goods, contributed to the slower sales increase.
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E-commerce outperformed in-store sales in 2024, growing by 2.1%, though this was in line with price increases rather than real growth. All sectors, except for restaurants, experienced this trend, with the home goods sector seeing declines across both channels. Overall, a contraction in combined in-store and online sales was observed in home goods and restaurants, while beauty products, specialised food, and cultural items saw increases.
The retail year was marked by instability, with significant fluctuations in performance, especially during the first half of 2024. The period was affected by calendar impacts, such as Easter and Mother's Day, and political uncertainty stemming from the dissolution of the French National Assembly in July. These factors led to disappointing sales in January and July, though the rest of the year saw some recovery. Notably, the 2024 Olympic Games had little positive impact on retail, especially in Paris.
The beauty and health sector stood out, with a 4.2% increase in sales, continuing its strong momentum from 2023. However, the home goods sector struggled, facing challenges from political instability, high material costs due to the war in Ukraine, and weak housing markets. The gifts, culture, and toys sectors performed well, particularly in December, driven by strong tourist demand despite the broader economic challenges.
Retail traffic continued to decline in 2024, though at a slower rate than in previous years, with city-centre stores seeing more significant drops compared to shopping centres and commercial zones. Consumer behaviour in 2024 was dominated by price sensitivity, impacting the sales of eco-friendly and locally manufactured goods.
Looking ahead, the economic outlook remains cautious. The French economy is expected to grow slowly in 2025, with household consumption increasing by just 0.9%, hindered by fiscal consolidation measures and political uncertainty. The unemployment rate is predicted to rise to 7.8% in 2025 but should start to decline in 2026. Retailers are likely to face ongoing challenges as consumers remain cautious and savings rates stay high, with further uncertainty surrounding investments in housing and durable goods.
Overall, the retail sector navigated a turbulent year, with some sectors managing modest growth, while others, particularly home goods and restaurants, faced difficult conditions. The year ended with a slight improvement, but the sector will likely continue facing challenges due to economic and political factors.
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