Consumer spending is one of the main factors that determine the trends of the French economy. Over the years, France has recorded significant variations in consumer spending rates, which reflects the economic changes that affect society. The recent period has witnessed significant changes in how the French spend their money, a phenomenon that can be linked to several factors, including inflation, the cost of living, and changes in consumer behavior.
Consumer spending in France: data and trends
According to statistics, French consumer spending on goods and services is estimated at around 55% of the country’s GDP. This figure reflects the size of strong domestic demand, which depends largely on individuals’ decisions to allocate their money. From time to time, new indicators emerge that indicate changes in consumer behavior, such as changes in spending on food, travel, or entertainment services.
In recent months, France has seen a decline in spending in some sectors due to inflation and the rising cost of living. When the inflation rate rises, consumers face greater pressure, which reduces their ability to spend in some areas. For example, we have seen a decrease in spending on luxury and travel, while spending on basic necessities such as food and transportation has increased.
Factors affecting consumer spending
French consumer spending patterns are affected by many factors. One of the most prominent of these factors is inflation, which raises prices and reduces individuals’ purchasing power. When the prices of basic goods such as food and fuel rise, consumers’ disposable income decreases, forcing them to cut back on their spending in other areas.
On the other hand, interest rates play a major role in the impact of spending. When interest rates are low, access to credit becomes easier, leading to increased spending on luxury goods.
Household consumption of goods falls in October 2024
In October 2024, household consumption expenditure on goods fell over one month (-0.4% in volume* after +0.1% in September 2024). This decrease is mainly due to lower purchases of manufactured goods (-1.3%) and also due to lower energy consumption (-1.2%). Food consumption is increasing (+1.2%).
Manufactured goods: sharp decline
In October 2024, household consumption of manufactured goods fell sharply (-1.3%), after a 1.6% increase in September 2024 – revised data. This decrease is explained by lower spending on textile clothing (-5.1%) and to a lesser extent on durable goods (-0.6%).
Clothing and textiles: strong decline
In October 2024, spending on clothing and textiles fell sharply (-5.1% after +6.4% in September 2024 – revised data). This decrease is mainly due to lower spending on clothing and, to a lesser extent, to lower purchases of footwear and leather. However, spending on clothing and textiles is still 2.0% higher than in October 2023.
Durable goods: Slight decline
In October 2024, consumption of durable goods started to decline slightly again (-0.6% after +0.8% in September 2024 – revised). This decline is mainly linked to lower spending on capital goods, most notably computers and telephones, as well as lower purchases of used cars.
Other manufactured goods: Almost stable
In October 2024, consumption of “other manufactured goods” was almost stable for the second month in a row.
Food: A clear rebound
In October 2024, household food consumption rebounded significantly (+1.2% after -1.4% in September 2024 – revised). This increase is mainly due to higher purchases of agricultural food products, particularly “other food products”, while consumption of agricultural products (unprocessed products) is again declining.
Spending on basic goods
Despite economic pressures, spending on basic goods continues to represent the largest part of monthly expenditure. Food and beverages remain a priority for consumers. Recently, with the increase in prices, French consumers have become more cautious in their purchasing decisions. There is a growing interest in searching for offers and discounts, which affects the way money is spent.
Research also shows that there is a shift in consumer preferences towards local goods and organic products. The French are increasingly moving away from imported goods, with a focus on supporting the local economy.
Social influences on spending behaviour
Social factors play a major role in determining how and when the French spend their money. For example, in times of health or economic crisis in France, spending priorities change. This change is manifested in increased demand for health services, or in decreased spending on leisure activities. During holidays and special occasions, consumers return to spending more on gifts and celebrations.
Digital spending: the shift to online shopping
Recent years have seen a shift in the purchasing methods of the French. Online shopping is growing significantly. Shoppers are no longer limited to buying in traditional stores. In fact, online sales have surpassed traditional sales in some sectors. This shift reflects the desire of the French consumer for a convenient and flexible shopping experience.
Online shopping continues to attract large segments of the French, especially in the electronics and clothing sectors. This method allows consumers to easily compare prices and choose the offers that suit them, which enhances the competitiveness of different stores.
Comparing spending between different sectors
When comparing the sectors towards which French consumer spending is directed, we find that consumer goods such as food and beverages come first, followed by services such as transportation and healthcare.
