France Opens For Sale

As shops throughout France open their doors for the winter sales, the Government takes further steps towards the more general liberalisation of retailing. The sales started in France on 9th January, and they are scheduled to continue until 19th Feburary. Organised twice a year with great fanfare, the start and duration of the sales is determined by the Government, and the whole process is highly regulated. It is only during a sale that stores can sell goods at a loss, so the notion of ‘loss leaders’ to attract shoppers into a store is unknown in France, outside of a sale period or liquidation. However, the wind of change is in the air, with a succession of new measures being introduced by the Government to free up the operation of the retail sector.

Although she invoked several options, the Minister indicated that the idea of allowing shops simply to have a sale whenever they wished was being examined. This might include the possibility for shops to set aside, on a permanent, ongoing basis, an area of their shop reserved exclusively for sale products. Both consumer groups and some retailing organisations have reacted with horror to the idea, arguing that it will cause confusion in the minds of consumers, and will be open to greater abuse.

The exception is being made in this case, as the Government has argued that there is already an agreement in place between the trade unions and employers about Sunday working. However, there remains disagreement between the Government and the trade unions on the interpretation of the agreement, so things are not quite yet settled. The Government was also facing some embarrassment on the legal front, with a number of larger stores simply deciding to open on a Sunday, in breach of the trading laws. A number of these stores are now facing prosecution from trading standards authorities, with evident concern from the Government that the law itself was being brought into disrepute. It is by no means clear that there will be wholesale take-up of the Sunday trading option, as a number of stores have already indicated that they do not think it will be in their commercial interests to do so. In large measure this is driven by the costs of employing staff on a Sunday, where the payment of double time and time-off in lieu would be the norm. It remains to be seen just how the market leaders react, for if the bigger stores in a retail development decide to dip their toe in the water, it is likely others will follow. Contrary to popular belief, the current lack of Sunday opening in France has nothing to do with religious observance, but with a 100-year-old law that grants to employees the right to 24 hours complete rest in any six-day period. Employees can work extra hours on a voluntary basis, but employers are required to pay up to 300% of basic wage and grant an extra day in lieu.

A complicated system of wholesale price controls has meant that supermarkets have not been entirely free to set their own prices. This rule has now been loosened up, so that 'off-invoice' discounts supermarkets receive from producers can now be passed on to the consumer. In the Spring the Government is due to publish proposals aimed at reducing planning controls on the implantation of new supermarkets, a competition initiative that small shop owners await with trepidation.