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Sense of stability fuels consumer confidence

Sense of stability fuels consumer confidence

 

A year after the election of President Macron to the Élysée Palace, the frothy optimism about change in France has been replaced by slightly less heady – but still steady – levels of positivity.

 

Consumer confidence is not exactly buoyant, but it’s at a level where people feel secure in their financial position, and are willing to spend. The proportion of households in which now is considered an appropriate time to make large purchases is above its long-term average, and there has been a recent increase in the proportion of homes where people feel they have the ability to save for the future. When asked about how their living conditions compare with their situation a year ago, this figure is stable, though below average over the long term, official statistics show. The same pattern applies to how people feel about the year ahead. Unemployment levels remain just under 10 percent, but again are stable.

 

GDP growth in France last year was 2.3 percent, and there was a similar increase in average household income. French consumers are not just spending more money on the same things, however. Kantar Worldpanel research shows a sharp decline in spending on personal care items – partly as a result of consumers looking for do-it-yourself solutions they perceive to be better for them or for the environment, such as home-made soaps. Home care items and fresh food – especially fresh meat – are also taking a smaller share of shoppers’ spending money.

 

Where people are spending more is on organic goods and items they perceive as being of higher quality – 53.5 percent of households say they’re willing to pay a premium for better-quality items, which is significantly more than five years ago, when just 46.5 percent said the same thing.

 

When it comes to President Macron himself, the sheen has definitely faded from his crown. Kantar Sofres-onepoint research this summer for Le Figaro shows that only one in three French people says they trust Emmanuel Macron (down six points in the month to July) – its lowest level since he was elected. Nevertheless, this level is still significantly higher than that of his predecessor, François Hollande, at the same stage in his presidency (32 percent compared to 27 percent for Hollande in July 2013).

 

Part of the reason people have become cynical about their leaders is a prevalent sense of injustice, on several different levels. High unemployment breeds disaffection with public figures, but there is also a sense that the gap between rich and poor remains wide and is getting wider. Kantar Center on the Future of Europe research shows 64 percent of French people feel that inequality between rich and poor has increased over the past decade. The “me too” movement worldwide has found traction in France, and both men and women are grappling with how to define their roles and responsibilities. And France, like many other Western European countries, is facing questions about national identity as immigration changes its demography.