• The French economy remains weak; GDP grew by only 0.4% in 2014, compared to 2.6% in the UK, 1.6% in Germany and a (provisional) 1.4% in Spain.

• Unemployment is at a record high and consumer confidence continues to be the lowest of all the countries covered in this report series, even coming in below Italy and Spain, which does not bode well for the retail sector.

• Aggregated spending on the key non-food product markets sold through department stores amounted to €118 billion in 2014.

• This market has been shrinking, and in 2014 was €1.9 billion smaller than in 2009.

• Spending on clothing, the largest product market for department stores, has been in decline over the last five years, in both value and volume terms. In 2014 we estimate that French consumers cut their spending on clothing by around 0.2%.

• The other important category to department stores, personal care goods, has been much more resilient, growing by 16% over the five years.

• However the last two years have seen a real weakening, and we estimate that the personal care goods category grew by just 1% in 2014.

• The mixed goods sector (including department stores), captured 5% of spending on clothing in France in 2013, we estimate.

• This is significantly below the shares captured by similar retailers in Germany, Italy or Spain. The strength of the hypermarkets is certainly a factor here, but so is the vibrant fashion retail sector.

• Some 14% of adults shop at these stores for apparel according to consumer research commissioned for Mintel report Clothing Retailing – France– October 2014.

• This lags other non-specialist channels and again, is significantly lower than in Germany, Italy or Spain.

• The sector took an estimated 3% of spending on beauty and personal care goods in 2013.

• Consumer research commissioned for Mintel report Beauty Retailing – France – January 2015 showed that 29% of beauty shoppers use department stores for beauty products (cosmetics, fragrances and skincare).

• Department store retail sales grew by 1.3% to reach an estimated €4.8 billion in 2014.

• In the last few years, department store sales have been driven by the strength of Paris and the resilience of the luxury market, which in turn has been underpinned by high-spending tourists.

• However there has been a real slowing of growth in the numbers and spending of tourists in the last couple of years and as a result we expect only subdued growth of between 1% and 2% in 2015.

• Mintel estimates that sales through the broader mixed goods sector grew by 1% in 2014 to €7.4 billion.

• In terms of its share of all retailers’ sales, the mixed goods sector is far less significant in France than it is in the other countries in this report, in part due to the dominance of Paris for the main operators, but also due to the strength of the hypermarkets, perfumeries and vibrant fashion sector.

• France is home to four major department store retailers.

• The leader by some margin is Galeries Lafayette, followed by Printemps, although the latter is closing the gap.

• Paris dominates the sector – the flagship stores of Printemps and Galeries Lafayette are hugely important, BHV Marais operates primarily in the Paris region (just two stores elsewhere, both in Lyon) and LVMH-owned Le Bon Marché has just the one store in the capital.

• There is a huge disparity between the Parisian flagships and the provincial department stores, not only in size, but also in terms of sales and sales densities.

• We calculate that Paris accounts for almost 60% of the combined sales of the four chains.

• In recent years, Printemps has edged more upmarket, but rival Galeries Lafayette has moved ahead in terms of e-commerce and international development.

• Galeries Lafayette is the most frequented department store online. Printemps does not sell online via its main website, but via placedestendances.com, which it acquired in 2013.

• Internet access is low in France by Northern standards, and so lower than in the UK and Germany, but it is higher than in Italy or Spain.

• E-commerce has not achieved the penetration levels seen in Germany or the UK, but it is gaining acceptance.

• In Mintel’s E-commerce – Europe, July 2014 report, we estimated that total online sales in France in 2014 would total some €31.8 billion incl VAT. That would represent 6.8% of all retail sales (excluding fuel).

• We think there is huge potential for growth online: in the UK, for example, department stores such as John Lewis, Debenhams and M&S see online generate double-digit percentages of their total sales.

• Department stores are not a heavily used format in France compared to say the UK or Spain.

• Galeries Lafayette has a lead over Printemps in shopper numbers: 15% of consumers have shopped at Galeries Lafayette (either in-store or online) in the past six months, versus 10% at Printemps.

• For a market leader, this is quite a low penetration rate, compared to those of the largest chains in Germany, Italy and Spain.

• All the department store chains register a typical shopper that is younger than the average consumer and all bar Galeries Lafayette also register a typical shopper that is more affluent than average.

• Printemps has an older but more affluent profile, as a result of its more upmarket positioning, while Galeries Lafayette seems to have a broader, more middle market appeal.

• BHV and Le Bon Marché both have younger and wealthier profiles, probably reflecting their predominantly Parisian customer base.

• Pricing is an important issue for French consumers, many of whom would like department store retailers to engage in more price matching and do not feel they get value for money.

• The all important clothing ranges also fall short for some shoppers, who feel more could do be done to get them to shop there.

• Younger shoppers tend to agree more that the ranges could be more fashionable while older customers are more likely to want a wider range of sizes and more age appropriate clothing.

• Younger customers are more likely to say they find it hard to find what they want online, and also to want a bigger online offer and more delivery options.

Figure 3: France: The consumer: Attitudes to department stores, February 2015

Base: 386 internet users 16+ who have visited or purchased at department store in the past six months

(a) eg beauty treatments, cafes/restaurants.

(b) eg next day/weekend/early morning delivery

(c) eg more own-label brands, better promotions

Click here to zoom

Source: Lightspeed GMI/Mintel

The leading French department stores have a glamorous image and high profile brands, but in fact, the sector is quite underdeveloped in comparison to other countries. The sector also accounts for a much smaller proportion of all retail sales and captures a much smaller share of clothing spending. In addition our research shows the department stores to be much less shopped than their foreign counterparts.

We think the main reason for this is the dominance of Paris; BHV operates primarily in Paris and Le Bon Marché only has one single store there, while the Paris flagships generate around 50% of turnover at both Printemps and Galeries Lafayette. In France Printemps has only 15 other stores, and Galeries Lafayette 60, across the whole country. Indeed we estimate that around 60% of combined turnover of the four chains derives from Paris.

Outside the capital, the department stores are weak and irrelevant for many ordinary French people. The strength of the hypermarkets in the country is one factor, as is a vibrant fashion retail sector and the growth of online. Department stores are often perceived as expensive and given the ongoing squeeze on household budgets, shoppers can find many other places to shop that are cheaper.

There is no doubt that there is plenty of money being invested in the department store brands. Given their high profile and the intense competition it is vital that operators continue to invest in store environments, especially in the flagship stores, in order to keep customers, both domestic and tourists, coming through the doors. Online too is a weak area, but one that has huge potential, which the main players are only just waking up to.