Independent Retailers Likely To Feel Most Pain From 'Gilets Jaunes' Protests: Moody's

By Steve Wynne-Jones
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Independent Retailers Likely To Feel Most Pain From 'Gilets Jaunes' Protests: Moody's

Following the fifth weekend of 'Gilets Jaunes' (Yellow Vests) protests in France, Moody's has said that the protests are credit negative for retailers, with independent operators likely to feel the most impact.

"While the protests were on a smaller scale on the weekend of 15-16 December, they could continue until Christmas, which would further dent sales in December, the peak period of activity for the retail sector," commented Guillaume Leglise, assistant vice president – analyst at Moody’s.

"We believe retailers that would suffer the most are small independent merchants, which have limited financial resources and limited geographic diversity. In addition, the protests may have reduced visitor numbers, hurting tourism-related retailers."

Retail Disruption

In early December, France's Fédération du Commerce et de la Distribution (FCD) estimated that the disruption caused by the protests had lowered revenue of all retailers (across all categories) by €1 billion, with Procos, France's federation of specialty retailers, suggesting that retailer sales are down by between 25% and 40% as a result of the protests.

In terms of food retail, protestors have blocked roads and access to retail parks, which is disrupting grocery supply chains, Moody's said.


"French hypermarket and supermarket sales have declined by about €500 million since the beginning of the protests, according to the FCD," said Leglise. "However, the disruption caused by the protests will be temporary and manageable for large French food retailers such as Carrefour S.A. ((P)Baa1 stable) and Casino Guichard-Perrachon SA (Casino, Ba1 negative)."

Online Sales

The impact of the protests is likely to be felt in the 2018 results of major retail groups, however they have provided a boost for online operators, in particular Amazon.

"Many consumers forced to purchase their Christmas gifts online will probably do the same next year. However, many retailers we rate have robust online operations, such as Fnac Darty SA and Casino’s CDiscount," said Leglise.

"The French government has also made some concessions, including some tax cuts, which should directly increase disposable household incomes and should help support demand in 2019."

© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: European Supermarket Magazine.

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