We are seeing a revitalisation of the city centre as French retailers develop their trading models to respond to changing consumer behaviour and demands. Businesses are developing new and innovative city centre store formats to meet the expectations of increasingly eager, demanding and digitally connected customers in both the food and non-food sectors. For more information see our report Supermarkets - France - November 2018

What we've seen

  • Several established French retailers have been opening stores in city centres, including Carrefour, Leroy Merlin, Decathlon and IKEA.

  • Numerous home delivery services for grocery are now available in Paris and other large cities including Amazon Prime Now, Leclerc chez moi, and Carrefour Livraison Express.

Urban stores are flourishing

With their higher buying power, inhabitants of city centres such as Paris, Lyon and Lille are attracting investment from retailers that have traditionally operated from out-of-town or edge-of-town locations. For many people living in urban centres, visiting large stores such as IKEA and Decathlon, or even a hypermarket can require a car journey of several kilometres, often taking up a large part of the day.

We’ve seen several examples of such retailers developing city centre formats to extend their reach to an audience underserved by out-of-town stores. Furniture retailer BUT for example has opened BUT City stores and Decathlon its Decathlon City format. DIY market leader, Leroy Merlin has opened several small stores in Paris suburbs and in June 2018 opened a flagship on the prestigious Place de la Madeline. At the end of January it opened a store in Paris with a different concept, called 'Leroy Merlin l’Appart', with just 2,200 sq m (the smallest in the whole store network) in the Clichy-Batignolles area.

IKEA to open in Paris in May

In May 2019 IKEA is to join Leroy Merlin on the Place de la Madeline, opening a store with 5,400 sq m.

Back in 2014 IKEA France announced its initial plans to open in Paris, where it says that a majority do not have access to a car. With its normal stores trading between 20,000 and 25,000 sq m, the store will be four times smaller than average. In developing the format, IKEA asked its Parisian loyalty card holders to put forward their own ideas for the store on the collaborative platform, Fanvoice, as a kind of virtual brainstorming. The questionnaire received some 2,000 comments and ideas, including such concrete suggestions such as “focus on items that save space in small apartments”, “include a click and collect space” and “offer gift cards for recycling old furniture”

The store will have a restaurant on the ground floor. No furniture will be available in-store, only small items such as textiles, candles and accessories can be bought on-site. Items will be presented in the form of room solutions for small spaces. The rest of the offer including all large furniture, will be available to order with in-store collection and at other collection points (the number will double by August) or, a novelty idea, with delivery by bike .This store should encourage browsing, with customers able to order large items which will be fulfilled by three of the seven stores in Ile de France and a warehouse that will open in February in Genneviliers. The store is part of IKEA's strategy to build its online business. Management expect the city centre store to attract 3 million visitors a year, who will have a smaller spend than in the large stores, but will hopefully visit more frequently. It remains to be seen whether the store will cannibalise sales from IKEA’s suburban stores.

What about food?

Retail provision for buying groceries in Paris is expanding – home delivery services include Amazon Prime Now, (which includes a link up with Monoprix), Leclerc and Franprix. Things are set to hot up even further when the Monoprix tie up with Ocado systems becomes operational later in the year. 

Over the last few years, the hypermarket operators have been developing city centre convenience stores, but are now taking things a step further. They have been opening “collection points” instead of stores, which enable time-pressed shoppers to pick up their online orders from a location with extended opening hours. Inspired by the French online grocery “Drive” model these have been dubbed “piéton Drive” or “pedestrian Drive”. Auchan began testing a format in the 15th arrondissement of Paris in 2014, while Leclerc opened its own in Lille in April 2017. Carrefour has been opening several as part of its Carrefour 2022 transformation plan.

With these establishments, the shopper has access to a larger product range than in a normal convenience store and avoids the delivery charge and the obligation to be home at a fixed time. They are collection only points, no groceries are available to buy on-site.

It’s also a cheaper way for retailers to get into cities, in terms of property and staff costs. Intermarché opened its first “piéton Drive” in Paris in October 2018 and plans several other openings during 2019. Leclerc opened E,Leclerc Relais in January 2019 and has a target of 80 over the next four year. Carrefour has been opening “piéton Drive” since April 2018 and wants to have 42 in total, with 21 in Paris and 11 in the Lyon region.

Other retailers have developed other solutions - stores open 24 hours, such as Franprix, while in some stores Monoprix has allowed customer to pay by phone for small purchases without going to a till. Casino has opened a pilot futuristic store in Paris, where we can see various potential developments for the future of food retail (see Analyst Insight piece "Le 4 Casino" - the future of retailing ?" in October 2018. 

New solutions for new consumer behaviour

Over the last few years we’ve seen an increase in people living in cities and towns, which we explore in Mintel trend Rebirth of Cities. The attraction of urban centres is clear - they offer greater employment opportunities, high-quality education and more housing options.

Increasingly people are shopping for groceries more frequently with smaller basket sizes, with convenience becoming much more important as a result. City centre inhabitants tend to be wealthier and buy higher quality goods. There also tends to be a larger proportion of younger people.

There tends to be a shortage of retail space in cities, and what there is can be expensive. Retailers need to adapt their ranges accordingly, maintaining relevance with their target customers.

The same applies for non-food retailers. Many are compensating for the loss of space with new technology such as touch terminals and staff equipped with tablets to present the whole range on-screen.

What it means

  • These developments show how the future of retail lies in the effective combination of the digital and physical worlds

  • The standards set by Amazon have changed consumer expectations about levels of service and choice of delivery options and other retailers need to look to match these. 

  • City centres will continue to be revitalised as retailers look for new solutions to stand up to Amazon and to respond to changing consumer demands. 

Back to top