Wary French Consumers Cast Doubt on Recovery
SECOND Markdown!'' is the sign greeting many French consumers - even in the toniest of Parisian stores - as they ply their favorite shopping streets. It is an indication that retail spending in the fourth quarter has failed to reflect the economic turnaround the government insists has begun.
French spending on manufactured goods in the October-December period fell 2.1 percent compared with the previous quarter. Spending in September had been propped up by a billion-dollar-plus injection from the government in the form of increased payments to families for school-year purchases.
The government is counting on a better January, figuring that purchases were put off in anticipation of post-Christmas sales. But one fresh survey by the national economic statistics institute, INSEE, leaves room for doubt: Consumers have added fears of a falling standard of living to concerns about unemployment. About 3.3 million French workers, or more than 12 percent of the workforce, are expected to be without jobs this month.
Sales, discount stores, even swap centers - something never heard of in France until recently - have become a growing part of the landscape, as French consumers adjust to a morose economic picture.
If January spending figures - and the lure of all those sales - prove disappointing, Finance Minister Edmond Alphandery could decide to implement some new pro-spending measures - to help convince the French that things really are looking up.