Purchasing power, stocks… how will the sales go this year?

2020, the same question for traders: how will the sales take place, a traditional high point of consumption in France, consecutively disrupted by the Covid-19, ecological concerns, supply difficulties and today galloping inflation. The director of the economic observatory of the Institut Français de la Mode (IFM), Gildas Minvielle, knows the sector perfectly, but cannot see that it is “difficult to know exactly” how consumers will present themselves during the Sales. summer season, which begins on Wednesday and will continue until July 19, in a context of inflation not seen for more than 30 years.

“Discretionary” assets at risk

In any case, on the stock market, the heavyweights of “fast fashion”, such as Boohoo, Asos, Zalando, or even Inditex, despite the Spanish giant’s insolent financial results, have been looking gray since the beginning of the year: their prices have been falling. 45%, 60%, 66% and 24% respectively. Performances to be compared with the European Euro Stoxx 50 index, which lost 20% of its value.

Market concerns also apply to high tech and furniture. “We have never seen a period when purchasing power drops, when sales of discretionary goods (non-essential, editor’s note) do not drop,” explains Clément Genelot, financial analyst specializing in the sector. of distribution at Bryan, Garnier & Co.

Sandra Hoibian, Director General of the Research Center for the Study and Observation of Living Conditions (Credoc), for her part recently estimated that if consumers with tighter purchasing power cannot significantly reduce their food expenditure, they are going to “cut the pleasure purchase”.

The morality of households, which plays into their desire to consume, has also been hard hit since the beginning of the year, which began with the Omicron variant, recalls Gildas Minvielle. Added to this was the conflict in Ukraine and the rise in inflation in many expenditure items, energy, transport and then food.

The issue of stocks

There is also the question of stocks, which the sales period must allow to be sold. The specialist in the field, the boss of the Veepee site Jacques-Antoine Granjon, told AFP on Wednesday that he had “less stock available to him than in previous years”, the brands having for some “returned to the store that of previous years” .

In a very uncertain context, companies have also shown themselves to be more cautious in their orders and have favored closer sources of supply, such as Morocco, to meet demand more quickly and more efficiently.

Stéphane Rodier, owner of three high-end ready-to-wear shops in Granville, Saint-Malo and Avranches, says he suffered “deliveries delayed by a month, sometimes by two” due to supply chains disrupted by the Covid-19, the war in Ukraine or the congestion of Chinese ports.

In fact, he has plenty of stock to sell… but finds it “amazing to sell summer products on sale, when they have to be sold at full capacity”, the day after the start of summer. “We certainly need cash”, which fills up thanks to the increased activity during the sales, “but also margins, while the repayment of loans guaranteed by the State (PGE) began in April!”

Last factor of uncertainty: the environmental concerns of consumers, who are turning massively to the second hand.

Stéphane Rodier, also treasurer of the National Clothing Federation (FNH), believes that the very principle of the sales must be rethought. “Producing in large volumes that we then have to sell off to get rid of is not at all ecological”, he regrets, calling for “global reflection” to bring out “viable solutions that do not make us not consume for the sake of consuming”.

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