Winter sales : the 2009 edition plagued by the financial crisis
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The winter sales season has started for about a month all over Europe. Some countries such as Great-Britain have started it at the end of December while most others did in January. Sales are a global phenomenon in the Union but they are not subject to a specific legislation at EU level. Each Member State can decide (or not) of the way they are managed. Thus, as the financial crisis is present in all the headlines and political speeches, it is interesting to assess whether these looming troubles have had an impact on the great sales tradition. Most economists and CEOs interviewed ahead of the sales season predicted that it would be an occasion for frustrated customers to have « revenge » on their financial problems for a month. The president of the online shopping website 24h00.fr even talked of “an exceptional edition for 2009” in Le Parisien on January 3rd. Equally optimistic was Jean-Christophe Caffet, economist for Natixis (note: one of the largest French investment banks), who declared for Le Monde on January 22 that he felt very confident regarding good results of the winter sales, betting on the fact that many people had not so much benefited from discounts in the summer of 2008. Finally, many shopkeepers were awaiting the sales season with much impatience in order to make up for the decrease of their cash-flow. This was particularly true in the clothing sector. (Le Monde on January 7)In France, while the cold has persuaded many to stay at home at the start of January, some have chosen to enjoy the warmth of shopping centres and department stores. The Galeries Lafayette (note: a famous department store in Paris) have announced a slight increase of their sales volume in Le Parisien on January 8 in comparison with 2008. Its competitor Le Printemps disclosed identical figures in Le Figaro. However, most shopkeepers admit that these good cash-flow results and increase of purchased items are due to the huge discounts they applied during the first week of sales. 50% and 70% discount labels were not uncommon at the beginning of this year’s “festival” in an effort to avoid bad surprises. In the previous years, such discounts normally occurred after the second or third week of sales. To make up my own mind, I went interviewing Parisian shopkeepers in different stores in order to ask them how the much echoed crisis had affected them in relation with their customers and cash-flow. Most of them painted a pretty negative picture. At Célio and Naf Naf on Boulevard Saint-Michel, I was told about the disappointing figures of the 2009 sales season. Crisis has had a real impact on consumption of necessity goods such as clothes. Their sales volumes decreased in comparison with last year despite the sizeable discounts that were offered at the beginning of the sales season. This trend was observed in other stores of the same chain as much in France as in the rest of Europe. In the meantime, some others like the sales manager of the Eram shoe store, who claims that the crisis is a mere psychological media-driven phenomenon are quite satisfied of their sales season. In contrast with everything that was feared in the context of the crisis, results are similar to previous editions, if not slightly better. It is true that the strategy was a bit different this time with high discounts from the outset. Finally, I did not have the chance to interview owners of the websites myself but it seems also that online shopping has thrived last month. Many websites have announced “historic” figures. 24h00.fr has sold 20% more articles than January last year and Spartoo has had the same results as in December according to a Figaro article from January 9. Sales are not over yet but they have been again this year the focus of debate. It will be possible however to reflect on its outcome once the season is over. It seems though that a pretty negative picture is emerging for most shops except online ones. Maybe the laws on sales passed in France will have some impact. They allow for two supplementary weeks of sales seasons anytime during the year except during a month preceding the winter or summer sales season. This will give us the occasion to have a look at the issue again... Matthieu MolliconeTranslation : Julien de Cruz