Seven in ten French consumers reported seeing higher prices for everyday items in the first half of this year, a new report by BCG has found, however just 9% reported earning a higher income during this period.
BCG's report, which forms part of its 2024 European Consumer Sentiment Report series, also found that more than six in ten French consumers expect prices to keep rising between now and the end of the year, and savings to either stagnate or decline.
Spend On Basic Items
As inflation has risen, French consumers have spent more on 'basics' (37%), with spending down in most categories – in luxury fashion, 39% of consumers say they are spending 'somewhat or a lot less', in apparel, the percentage is 45%, and in home appliances, the percentage is 35%. Spending on snacks and alcohol was also down.
While 18% of consumers say they have spent 'somewhat or a lot less' in grocery, close to a quarter (23%) report spending 'somewhat or a lot more', due to increased prices.
'Groceries was the only category of the 11 product types we studied, with a net spending increase for the first half of 2024 (5%) despite the fact that people reported trying to trim grocery costs by buying less, looking for deals, and switching to lower cost brands,' BCG reported.
In-Person Shopping
BCG's study also found a strong preference for physical shopping, with fewer than 50% of French consumers completing their purchases online. Given a choice, more than 75% would prefer to shop at a physical store without an online presence over using an online-only vendor, it noted.
The types of products consumers are least likely to buy online include groceries, alcoholic and non-alcoholic beverages, and over-the-counter medications – items typically bought frequently or on impulse. On the other hand, categories such as apparel, home appliances, toys and games, and luxury fashion are more commonly purchased through online platforms.
BCG noted that businesses should focus their efforts on product assortment (including improved local sourcing), dynamic pricing, and hyper-personalised promotions in order to strengthen their ties with French consumers and remain competitive.
'We've found that the impact is greater when companies launch changes in all three areas simultaneously,' it added. 'Due to the time and resources needed, however, most companies choose to address one area at a time.'
