Between budget constraints and personal desires, consumer spending holds firm

This barometer survey reveals a rebound in French consumer spending in 2024 despite the uncertain economic environment. Encouraged by lower inflation, households are reinventing the way they consume while simultaneously juggling between spending priorities and the satisfaction of new aspirations.

A recovery in consumer spending supported by lower inflation

In 2024, total spending per card rose by +3.3% at a pace similar, on the face of it, to that of 2023. In 2023, however, with inflation running at +3.7%, increased spending was mostly driven by higher prices. In 2024, with inflation falling to +1.3% (according to the Insee national statistics institute), this increase reflects a true recovery in sales volumes.

This dynamic is chiefly driven by the older generations. Spending by the over-64s grew by +8%, followed by the 55-64s (+6%), while spending by the under-35s remains stagnant. Music streaming is a perfect illustration of this phenomenon with a 22% increase in spending among the over-64s, while the under-25s saw their spending fall by 4%. Similarly, in the fast fashion sector, the 55-64 age group drove a 28% increase in spending, compared to just 12% for the under-25s. These differences undoubtedly suggest that the spending patterns of younger consumers are being adopted by the older generations.

Two drivers of consumption in 2024: bargains and the desire to escape from daily routines

In 2024, two major dynamics shaped the spending behavior of the French, revealing aspirations of both an economic and emotional nature:

• Consumption driven by the search for bargains: in a context of budgetary caution, the French are turning to sectors offering ‘bargains’ that enable them to optimize their purchasing power. Online marketplaces (+22%), fast fashion (+20%), private sales websites (+18%), and second-hand fashion (+17%) all benefit from this trend, as does non-food discount (+8%). We also see a rise in average baskets in the online marketplaces and second-hand fashion segments, each recording an increase of one euro, rising to €38 and €22 respectively in 2024.
  
• Consumption driven by the desire to escape from daily routines: at the same time, the French are expressing a growing need to break out of their routines and are turning to sectors that offer them relaxation and a sense of well-being. Spending on tourism (+6%) and cultural leisure activities was up sharply (+20%), along with video games (+12%), with an average spend of €21, and beauty and cosmetics (+9%), with an average basket of €46. These trends illustrate a desire to refocus consumption on pleasurable experiences.

E-commerce, the focal point of these dynamics, once again enjoyed robust growth (+7.4%), accounting for 28% of total spending by the French in 2024.

Certain sectors suffer from French people’s choice of spending priorities…

In 2024, several sectors show signs of a slowdown, such as cinemas (-1%), long-distance buses (-1%) and dating sites (-13%), which had all enjoyed a rebound in the wake of the Covid health crisis. In contrast, however, retailers such as bookshops, traditional off-the-rack clothing stores, shoe stores, and garden centers all reported modest growth (+1 to +2%).

… while sectors in the hospitality industry found a second wind thanks to the Olympic & Paralympic Games Paris 2024

In 2024, hospitality-related sectors (out-of-home catering, bars) enjoyed moderate growth buoyed up in part by the effect of the Olympic & Paralympic Games. Spending in restaurants was up by +3%, in bars by +1%, while fast food showed more sustained growth (+5%). ‘Grab-and-go’ food chains appear to have been more successful in containing the effects of inflation in the supply of food.
Stable since 2019, the average spend was €10 in bakeries and €18 in fast-food outlets. Conversely, over the same period, spending rose by €2 in traditional restaurants, to more than €36 in 2024.

During the Olympic & Paralympic Games Paris 2024, these sectors saw significant peaks in activity, especially in the Île-de-France region, with increased footfall from tourists and local spectators, offering a welcome boost to hospitality consumption.

Winning sales strategies in an uncertain environment

Certain sectors managed to stay ahead of the game by decoding consumer expectations and adapting their strategies accordingly in order to attract new customers and strengthen their loyalty. Among the seven strategies described in the Barometer survey, slashing prices seems to have been an effective lever for some sectors in encouraging customers to start shopping again. In 2024, for example, traditional food retailers were better able to resist the discount onslaught by controlling their prices. As a result, their spending stabilized (0%), while that of discounters fell by -2%.

Yves Tyrode, Chief Digital & Payments Officer of Groupe BPCE, emphasized the following points: “Our Digital & Payments Barometer survey highlights the resilience of French consumers in 2024, revealing how they have adapted their purchasing behavior in the face of economic challenges. These new spending patterns can harbor growth opportunities for retailers thanks, in particular, to e-commerce. By sharing these insights, Groupe BPCE is also reasserting its commitment to helping its economic partners to understand the major changes in consumer practices and to innovate, notably in terms of payment, in order to adapt to these changes.”

Myriam Dassa, Director of Groupe BPCE’s Digital & Payments Barometer survey, said: “This new annual barometer survey also reveals how certain retail sectors have managed to stand out despite a second year of galloping inflation negatively impacting consumer purchasing power. Based on our analysis of this data, we have identified 7 winning strategies for 2024, to be adapted to the specific characteristics of each player in the retail and distribution sector.”