JPMorgan retail analyst Simon Irwin said that French consumption had fallen more dramatically than expected and more so than in the UK this year.
However, he said that consumption in the country should start to recover in the first quarter of 2009 and “could be among the strongest in Europe by Q3”.
The forecast will be seen as good news for domestic and international retailers with a significant presence in France, including Kingfisher, Kesa, New Look and H&M.
Irwin said the reasons behind the French retail market’s predicted return to form include its relative immunity to the credit crunch – when compared with the UK, Spain and Ireland – and French consumers’ sensitivity to inflation.
“They have had no growth for so long and the jobs market is not very healthy,” said Irwin. As inflationary pressures diminish, which is widely expected over the next six months, French retailers should be able to regain strength, he added.
Irwin said: “France is not particularly vulnerable to credit crunch factors; it has the least indebted consumers in Europe and its mortgage market has a high level of equity and fixed rates.” He added that unlike the UK, France’s shoppers are not driven by the availability of credit.
PricewaterhouseCoopers chief retail adviser Michael Poynor agreed that the French consumer has a very different psychology to those in other European markets, particularly the UK shopper.
“The French economy has been more morose for some time and consumers there are more accustomed to shopping through uncertain times,” he said.
“In the UK we have come from a buoyant market which is now far from that and there is a lot of anxiety.”
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