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Downturn gnaws away at French spending on food

Latest update : 2008-09-24

Some 3,000 restaurants went bust in France during the first quarter of 2008, as the current economic downturn and the recenty approved smoking ban helped force a change on people's eating habits.

Galloping inflation has eaten away at French spending on food, making shoppers less choosy about brands and fresh produce and more willing to cut back on restaurant visits, according to a survey released on Tuesday. 

The survey by CREDOC, a state-backed research body specialising in French living conditions, found that many people retain their traditional attachment to the ideal of convivial eating, good food and a varied diet.
But sharp price hikes that have seen the cost of fruit rise 17.6 percent, milk and cream go up 14.8 percent and poultry prices rise 12.5 percent over the past year, have chipped away at the French attachment to the pleasures of the table. 

The survey of 1,004 people conducted in June, found consumers paying closer attention to price, more shopping at hard discount chains and fewer choosing supermarkets or the specialised food shops that feature on most French high streets.
The survey came on the same day that France's biggest consumer rights group reported that food manufacturers were in effect raising prices by quietly cutting the size of some items or the amount in some packets while not changing the price.
It found almost all people (97 percent) believed eating was a good opportunity to spend time with others and a source of pleasure but there was strong pressure to cut spending on food. 

Some 18 percent of people were cutting back on non-essential items, 28 percent were choosing lower range products and 17 percent were consuming less, while there was a sharp jump in the number of those comparing prices between shops more than normal. 

"In 2008 and 2009, there could be a reduction in the volume of food spending," the survey found.
The effects have not been confined to shopping alone. French restaurant and cafe owners have been fretting about demand for months and the survey found that 21 percent of people would go to restaurants more often if their budgets were not so tight.
"We are very worried," Daniele Deleval, vice-president of the UMIH hotels and restaurants association, told the daily Le Figaro on Tuesday. "Since the beginning of the year, business is down 20 percent on average and we see no sign of improvement." 

According to figures from credit insurer Euler Hermes published this month, bankruptcies of restaurants, cafes and hotels rose 19.7 percent in France in the first half of 2008. 

With average consumer spending power in France down 0.4 percent in the second quarter of the year, according to Economy Ministry figures last week, any reversal of the trend is likely to be some way off.

Date created : 2008-09-24