French Retailing Shows Weakness

French retail sales volumes fell by 0.1% in November after falling by 0.1% in October; July was the last month to produce a month-to-month increase in retail sales volumes. In July 2024, those volumes increased by 0.2%. Sales volume trends in France continue to be weak.

Year-over-year growth rates for all products show a 0.1% decline in volume which has a 51.7 percentile rank on data back to mid-2007. Among the various categories, food purchases have a sub-50-percentile ranking as do electronics and the sales of new autos. These sub-50-percentile rankings indicate that the current year-over-year growth rates are below the median growth rate for year-over-year sales since mid-2007. It's unusual to see food rank so low; however, automobiles and electronics certainly count as discretionary purchases and if the economy is under pressure we would expect to see some weakness in electronics and in auto sales; that appears to be the case in France.

Other categories show sales rankings that range from firm-to-strong. Strong sales emerged in footwear, a small-ticket item, where an 84.2 percentile standing derives from a year-over-year growth rate of 7.2%. Household appliances, a heftier household expenditure, show a 5.1% increase in sales volumes for an 81.8 percentile standing, also a strong result. Furniture sales, where the growth rate is a milder 1.3%, still scores a 71.3 percentile standing for this period. Textile sales are up by 1.5% year-on-year, which scores an above-median 67-percentile standing. For all industrial goods, a 0.5% increase in spending marks a 56.5 percentile standing overall, a small gain above its historic median rate.

France continues to struggle with growth. It also is facing political instability which creates problems of its own. Globally the political guard is changing and a lot of Western countries as well as in Japan show political fallout from policies pursued during COVID. These policies have generated voter dissatisfaction and have led to demands for change. Of course, the parties that are being displaced in this process claim that they are being removed for global conditions that were beyond their control, but people generally feel that the policies pursued in each instance were policies that were not really warranted by circumstances or that in some cases policies are believed to have made matters worse. There is a great deal of recrimination and denial post-Covid and the full facts still are not out. Leaks from the German Koch institute provide a peek into Covid policies and cooperation among G7 countries (here). These leaks and allegations help to explain the loss of political trust.

Since early-2024, French auto purchases have turned decidedly and consistently weak. France scored as weak at 27.4% in its EMU sentiment index ranking for December. French retailing in the EMU Commission survey has a 22.3 percentile standing (lower one-fourth to fifth in its queue of historic results), making it weaker than the EMU overall on retail confidence and the weakest among the four largest EMU economies: Germany, Italy, Spain, and France. Interestingly, the two largest EMU economies, Germany and France, have the weakest relative consumer scores in this December survey. Both countries are also working through political change.