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Retail

Local Stores, Online Benefitting From 'Profound Changes' To French Retail Sector

Local stores, discounters and e-commerce providers are among the businesses taking advantage of the 'profound changes' in the French retail sector brought on by the COVID-19 crisis, according to a new study by consultancy firm Alvarez & Marsal.

The group said that increased meal consumption at home is benefiting supermarkets and convenience stores, but having less of a positive effect on hypermarkets.

As with the financial crisis a decade ago, consumers are favouring price over product range, which in turn is driving the growth of the discounters.

In addition, one third of shoppers have switched to e-commerce channels for products they used to buy in stores, the study found.

More than half of consumers are worried about their personal finances, while 72% say that they have given priority to products considered 'essential' since the onset of the virus, avoiding discretionary expenses – something which is likely to hit the non-food sector hardest.

According to Alvarez & Marsal, non-food sales are likely to return to about 80% of 2019 levels in the second half of this year, with non-food retailers expected to see a sales reduction of around €40 billion this year.

Operating Models

'Distributors will now have to take into account the more agile operating modes that emerged during this crisis,' the report reads. 'Management teams will have to review risk management strategies, assess the impact on supply chains and stop initiatives and projects that are not a priority.

'In some cases, the purpose of their banners will have to be reassessed while ensuring business continuity in times of crisis. The sector will undoubtedly experience lasting changes.'

© 2020 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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