Pro Content

French Market Insight: A Flatline Summer With Gentle Upticks Into Winter

The French economy is almost in stagnation! Indeed, French GDP growth barely reached 0.1% in the third quarter of 2023 and was largely driven by a rebound in household consumption. This modest increase between July and September, however, represents a slowdown compared to the 0.6% growth recorded in the second quarter. For the entire year, INSEE forecasts an overall annual growth of 0.9%, which is identical to the Bank of France’s prediction, slightly lower than the government’s projection of +1%.
By Benoit Brecq

In this challenging environment, the French economy seems to be holding up, according to Bruno Le Maire, the Minister of the Economy, who points out that this resilience is happening against a background of high interest rates. According to INSEE, after a sluggish second quarter, household consumption of goods and services increased by 0.7% in the third quarter, driven in part by higher food consumption, as inflation moderated. Food expenditure were boosted by increased purchases of beverages, bakery products, and pasta, while tobacco consumption continued.

What about the market for sports gear, particularly in-store sales? Is this market also experiencing turbulence? With the increasingly tense Israeli-Palestinian conflict all over the news, we interviewed some retailers in France to assess the state of the market and review the summer and late-season, which are coming to an end.

On the Atlantic coast, the assessment is somewhat mixed. For example, at NEWAY in NANTES, Thomas Martin, the store manager, says, “The summer season was quite challenging, with a catastrophic July.” He added, “It’s one of the worst months in the past 8 years, with an overall drop in revenue across all product categories.” As for the late season, Thomas notes, “the back-to-school figure is relatively stable compared to the previous year, with the rather warm weather making it harder to sell certain products like warm textiles.”

A bit further south in Bordeaux, Maxime Laboual, marketing manager at GLISSUP, tells us, “The summer season was a bit difficult with significant price increases and a decrease in foot traffic.” Consequently, the assessment is mixed: “Our revenue is stable, but with lower margins because we implemented promotions to clear excess inventory.” At HAWAII SURF in Mimizan, Adrien Charlet, the store manager, seems to agree: “We quickly realized from June onwards that we needed to forget about the pandemic years and their effects on consumer spending. The real summer rush didn’t happen until around July 20, and foot traffic gradually returned to its usual seasonal level, peaking around August 20.” He adds, “the late season is somewhat mixed at the moment; the weather was favourable in September until mid-October”.

On the Mediterranean coast it seems that we are once again on the same page. At KARUKERA Surf Shop in Saint Aygulf, Brice and Cédric Paque, co-owners, tell us, “The start of the season was quite challenging with very unfavourable weather. However, the end of September assessment was more positive, with the end of July and especially August and September, compensating with strong sales ” They added, “Foot traffic is slightly down, but it’s offset by a higher average purchase.”

Far from the coasts, the assessment is also fairly good. At DIGITAL Skate shop in Orléans, Nicolas Simmonet the store manager, said, “The summer season went quite well, with the classic collection, exclusive releases, sales, and clearance sales. ” Nicolas adds, “In the skateboarding industry, it’s quite challenging to compare one year to another due to the arrival of new brands and regular exclusive releases, we can’t really make direct comparisons.” In Reims, at MOJITO Skate shop, Franck Sisounol, the store director, observes, “The summer was rather good overall. Skate equipment sales weren’t as strong, but clothing compensated nicely with a return to traditional foot traffic at the back-to-school period.” He adds, “We saw a slight revenue increase compared to last year. However, it’s clear that the majority of customers are more budget-conscious, even though a minority doesn’t seem concerned at all.”

Regarding stock, it seems that most stores have more than an ample inventory of equipment, though stock levels for textiles were lower. Franck from MOJITO tells us, “T-shirts are the best-performing category once again this summer, with Carhart standing out. As for shoes, it’s a bit more complex, with the exception of New Balance Numeric, which is doing well, while most other brands are experiencing a decline.” A similar situation at DIGITAL, where Nicolas tells us, “The stock level is okay, with our strong textile sales. However, customers are much more price-conscious, as most brands have become relatively expensive.”

Adrien at HAWAII Surf in Mimizan observes, “The stock level is rather okay, with almost an understocking in textiles, which performed well this season. The overstock is more apparent in technical gear like surfboards, skateboards, or wetsuits, which had a harder time moving this year. Customers negotiate prices more often and we can see that they are more budget conscious.” Elodie from the same chain in Saint Jean de Luz notes a similar situation, “Textiles, especially swimwear, sold well, as did lycra’s. The good weather in the late season has caused a slight delay in launching Fall/Winter sales.” She confirms, “Stocks for technical items, particularly wetsuits, are somewhat more concerning, although they seem to be getting healthier compared to the previous season “

For specialists in technical gear, the assessment is similar. At Neway in Nantes, Thomas tells us, “Stock levels are quite high due to poor July weather. The surf department is performing well, with wing foiling maintaining revenue in that department.” Conversely, “Paddle and Kayak are really declining in terms of sales.” Brice and Cédric at KARUKERA seem to agree, “SUP, Skate, and Wetsuits are somewhat overstocked, and ongoing promotions due to high stock levels are disrupting the market. For us, textiles and surf gear are performing quite well this season, with very reasonable stock levels.” A similar assessment at GLISSUP, where Maxime says, “We have quite a bit of stock in general, so we did very few restocks this year. Wing foil and surf gear performed well in terms of equipment, but in terms of wetsuits, the water remained very warm until the end of October, so we have excess stock in that category.” He concludes, “Given the overall stock level we have, we won’t take too many risks with the 2024 launches.”

The assessment of the 2023 season seems unanimous: It was quite good, even though the euphoria of the pandemic is over, and stock levels are still higher than before COVID. Textiles seem to have performed well, and inventory levels for equipment are gradually reducing, although some exceptions remain, especially in skateboarding, wetsuits, and SUP. One thing seems to stand out: stores appear to have learned from this unique experience and are adjusting their stock levels. Will the customers still be there this year? Stay tuned…