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French Market: Shifting Summer Holiday Habits Impacting Business Expectations

French GDP growth was 0.2% in the second quarter of 2023, just like in the first three months of the year. As for acquired growth, in the first six months of 2023 this comes in at 0.5%. In other words, even if growth is zero in the second half of the year, France will still record an increase of half a percentage point in its gross domestic product for 2023.
By Benoit Brecq

After 2.6% in 2022, the government is forecasting 1% GDP growth for 2023 as a whole. This weak economic activity can be explained foremost by the sluggishness of household consumption, the traditional driver of French growth. In the second quarter of 2023, the consumption of goods, particularly food, continued to shrink while services rose again slightly and energy spending picked up again. Strikes in the first quarter against the pension reforms do not appear to have had any noticeable effect on consumption, however.

As for inflation, which has risen to levels not seen since the 1980s, INSEE estimate that the consumer price index has risen by more than 6% in recent months. Food price hikes are primarily responsible for keeping inflation high, accounting for 40% of overall inflation, despite constituting 16% of the average household expenditure. Unfortunately, consumer food prices will continue to rise at a constant rate although the reopening of trade negotiations between distributors and food manufacturers could slow this down. Consumers would only start feeling that in their wallets towards the end of 2023 (November/December) though.

With the summer season about to get underway, are price rises really changing holidaymakers’ habits? New booking habits seem to be emerging: August is less popular and travellers are rethinking their plans. In truth, it’s not quite as simple as that. And they aren’t far off. From Saturday 8 July 2023, all zones will be able to pack their bags for the school holidays. But you still need to have the means.

Consumer goods, heating, food… With this inflation, many French people have made concessions. But for now, one thing seems to be untouchable: holidays.

With air fares set to soar in 2023, the French are not giving up on taking a break from their daily lives. Although the economic context may not be deterring travellers from booking sites, it could be changing their behaviour: travellers are adjusting their booking habits to suit the current climate. The first finding is that, with inflation pushing up travel costs, French people are planning their getaways in the spring and early summer. August is out because of its excessive prices and travellers are increasingly opting for more off-peak periods. It’s often said that the Easter holidays foreshadow the season to come. So how does this second quarter look for our industry and what’s the mood like in our shops?

At Ocean Gate Surf Shop, an iconic store on the Quiberon peninsula, open all year round with over 400m2 dedicated to surfing, Shop Manager Laure Collin tells us: “The launch of the season during the spring holidays was rather tentative, particularly in terms of wetsuit and equipment sales.” She adds: “The May bank holidays were good for business with good footfall. However, June is off to a very slow start. The current weather conditions, with no waves for several days, are not helping.”

A little further north at Neway in Nantes, a boardsports shop that opened in 1995 and which, unlike its coastal counterparts, doesn’t see a huge difference in footfall between the summer period and the rest of the year, the situation seems similar, even though the timings aren’t necessarily the same. Rémi Harnois, Sales Manager, says: “We had a good April, which generally bodes well for the summer season.” However, he adds: “Unfortunately May wasn’t really up to scratch, despite the bank holidays, which set us back on previous years.” Nouvelle Vague & Co in Soulac-sur-Mer also saw a downturn, with Shop Manager Eric Delthil telling us: “The start of the season is down on previous years, with a 20% drop in footfall and turnover compared with last year.” Laure confirms: “Turnover to date is down on last year. The number of completed sales is also down.” She explains: “There is too much on offer at the moment for the demand and the very high stocks held by the various players in the industry, particularly in wetsuits and equipment, and the subsequent discounts, are having an impact on footfall and sales”.

Rémi, from Neway in Nantes, is a little more reserved: “Footfall is fairly stable, albeit down on a few years ago, but customers who come to the shop are buying more frequently, having researched online beforehand.” However, he does note: “Certain major purchases are sometimes postponed or more carefully considered, no doubt due to the economic climate and the effects on purchasing power.”

As far as deliveries to shops are concerned, the supply problems of the COVID years seem to be well behind us. Laure from Ocean Gate tells us: “Deliveries are in line with pre-orders. The scheduled quantities and dates have been met”. She adds: “At this stage of the game, we are still overstocked, especially in skateboards and neoprene. For the rest, it’s still too early to tell what stocks will look like at the end of summer.” At Neway, Rémi confirms: “On the whole, deliveries have been received as planned, with no major delays or shortages as in previous years. Some deliveries were even too early.”

When it comes to products, after the COVID years when hardware was highly sought after by customers, it would appear that this will no longer be the case in 2023. For 2023, it looks like the surfwear department will be the most popular at the start of the season. Laure from Ocean Gate tells us: “So far, the surfwear department is coming out on top”. She adds: “We’re sticking to the strategy of our three departments – wetsuit, surfwear and equipment – complementing each other. But we have placed orders accordingly with larger quantities of surfwear, which is doing very well at the start of the season.” Rémi from Neway explains: “We’re hoping for good surfing conditions to return so that sales of technical equipment can pick up again. We’ve had 3 completely flat weeks, which is not helping sales.”

With our industry being very weather-dependent, the start of the 2023 season has not proved favourable. The wave conditions over the May and early June bank holiday weekends did nothing to encourage people to go to the coast and surf. Let’s hope that the weather conditions over the 2 summer months improve to deliver a successful 2023 season for shops, enabling retailers and distributors to reduce their stock levels as this seems to be one of the major issues at the moment.