Pro Content

French Market Insight: Shop Turnover Up to 30% Higher Compared to Last Winter

One, two, three, four, five waves…After two years of pandemic, the terms “contact case”, “positive” and “new variant” are now part of everyday parlance here in France, much like they are in the rest of the world. But after the emergence of Delta then Omicron, are we dealing with the same epidemic as we were at the start 2 years ago?
By Benoit Brecq

Since the end of December 2021, the fifth wave of Covid-19 this winter 21/22 has smashed previous infection records on a daily basis in France with almost 180,000 new cases recorded at the end of December and 330,000 at the start of January. This easily surpassed the figures in the second wave that, at its peak in November 2020, had around 50,000 new cases each day. The difference in figures is in part down to an increase in testing: up to one million per day in France, compared to just half that in May 2020. At the start of this year, the rate of positive tests is pushing 16%, higher than that of November 2020’s infection peak. We can be thankful though that the rate of hospitalisations is not following the same curve as the infection rate. According to the World Health Organisation, this is the result of a more contagious but less severe Omicron variant. While the fifth wave of Covid-19 might – once again – make the French economy stall, Banque de France are taking a reassuring view on 2022. According to the financial institution, the French economy should have repaired the damage caused by the pandemic to reach its pre-crisis cruising speed by 2024.

This return to pre-crisis level growth is also being brought on by more sustained household consumption with people starting to dip into their savings, to the order of 170 billion euros racked up throughout the pandemic, again according to Banque de France. There are also large investments to come from the businesses that have maintained their profits during the health crisis. These investments may translate into a rise in employment (with an unemployment rate of around 7.9% in 2022) as well as an increase in employee spending power (with a rise in salaries?). These predictions remain uncertain and if additional health restrictions come into effect in the first quarter of 2022 it would lead to a weaker rate of growth next year in France, only to catch up again in 2023. It must be said though, problems with supply and recruitment could well take the shine off France’s economic success if they last longer than expected. It should also be said that neither of these two likely scenarios would reduce the nation’s debt. The inflation rise in recent months has become the government’s main concern, multiplying benefits for low-income households in the form of energy cheques, inflation indemnity and gas price freezes. Banque de France is foreseeing two phases following each other: after a peak of 3.5% for the harmonised inflation rate at the end of 2021, this will stay above 2% for a large part of 2022 before retreating to around 1.5% in 2024.

So how did our industry fare at the end of 2021 and how is it looking at the start of the new year 2022? When it comes to ski resorts, the start of winter 21/22 seems incomparable to last year. From Chambéry La Ravoire in the Alps, Christophe Finaz, Director of Montaz, a large shop with 25 staff, tells us: “Visitation numbers were excellent compared to 2019 and 2020 due to the snowy scenes since the start of December and a real eagerness for outdoor sports.” And this is already reflected in the figures, adds Christophe: “We are already up by 20% in turnover compared to last year which was already good.” It’s a similar story in the Pyrenees at SLIDEWAYZ in Soldeu where shop owner Merlin Balfour confirms that: “We are a Snowboard shop at the foot of the pistes with 6 employees and the start of this season has been excellent,” before adding: “Last year was quite strange with the ski lifts closing but this year we are up by 90% on visitation numbers and nearly 80% on billing. Compared to a normal year we are up 30% overall so it’s super positive.”

The weather conditions seem to have been pretty favourable for mountain shops, as confirmed by Christophe from Montaz: “the weather is by far the most important factor, beyond economic conjecture. The end of November and start of December were cold with decent snowfalls and that was reflected in our figures.” It’s the same story in the Pyrenees at SLIDEWAYZ where Merlin confirms that: “the early season snow and the good weather were favourable for sales.”

When it comes to product, technical equipment seems to have had good rates of sale and much like last year touring gear and especially splitboarding seems to be really popular. Christophe tells us: “Splitboards are still highly sought after products this season and once again we don’t have enough supply for customers.”

At street shops and especially skate shops, it’s a little bit more of a mixed bag. At XOXO in Marseille, Francis del Rosario says that: “We had an excellent year in 2020 with strong interest in skateboarding, especially with its debut in the Olympic Games.” However, he does go on to explain that: “visitation numbers were weaker during the end of year holidays compared to last year. The rise in Covid case numbers had a part to play in turnover and visitor numbers.” While the weather in the mountains was beneficial because of its snowfalls, it wasn’t necessarily so good elsewhere, Francis tells us: “The weather was pretty dreary for the end of year holidays with quite a lot of wind and rain and with our geographical location just next to the famous Marseille bowl, it was significantly detrimental to in-shop visitor numbers.”

At coastal, surf orientated shops, the outcome has been pretty positive as explained by Xavier Aufray, Shop Manager at ATS Surf Shop in Plouharnel, Brittany: “the start of winter went relatively well with strong visitation numbers in autumn and winter,” but on the other hand: “we slowed down a bit during the holiday season which is normally quite good for us,” explaining that: “it’s undoubtedly due to the health situation.” On the Atlantic coast the conditions were excellent Xavier tells us: “weather conditions are a big factor in bringing people into coastal shops, especially in the off season. We had superb wave conditions so we saw a lot of customers in the shop.”

When it comes to product, again, much like last year neoprene has been under attack this winter. Xavier describes that: “neoprenes naturally sold really well, even in spite of the delays experienced by almost all brands.” He adds: “foam boards are still really popular and now it’s all year round, even in winter.”

Finally, there were two topics that regularly came up in conversation. The first topic already affected a large part of 2021 and seems to be an issue this winter 21/22 once again: supply and delivery delays. Xavier from ATS Surf Shop says: “The COVID crisis deeply affecting ordering schedules, causing delivery delays due to high demands and shortages of raw materials looks set to continue for 2022.” He adds: “We are unfortunately going to have to contend with and manage customers’ impatience like we did in 2021.” This is a sentiment shared by Christophe at Montaz: “There are still delays to deliveries, we’re still waiting for products that were supposed to be for October 2021.” The second preoccupation is inflation on products for 2022 and although this looks to be marginal for winter 21/22, as Merlin from Slideways tells us: “there hasn’t been any price hike at the start of this winter,” Christophe does then add that: “Price increases will be felt from 2022 onwards.” This point may well prove significant throughout the year to come.

The start of the 21/22 winter has therefore gone pretty well for our industry but although the outlook seems to be positive, the current health situation is still concerning and unstable. Also, the heralded inflation rise constitutes another unknown factor for 2022 to deal with. Watch this space…