How will the French cope with inflation this year?
Despite forecasts of lower inflation in the coming months, consumers still seem very concerned about the economic situation and plan to tighten their belts in the coming year.
For the 2024 edition of its Barometer of New Consumer Trends, Wavestone surveyed French consumers about their spending, as the purchasing power crisis continues to be a pressing issue.
Having lived with inflation for several years, the French have gotten into the habit of cutting back on spending, though the extent of these cuts varies depending on the type of goods or services. As a result, in 2024, nearly one-third (32%) plan to reduce their food spending! Even essential goods are not spared by the purchasing power crisis, and the same holds true for energy. In fact, 57% of French people plan to cut back on their electricity bills, 49% will limit their gasoline consumption, and 45% will reduce their gas bills.
Even more affected than food and energy, spending on clothing will decrease for nearly two out of three French people (64%)! Spending on hygiene and beauty products will also decrease for 39% of them. As for other areas of spending, leisure and social outings will be impacted by inflation, as 56% of French people plan to cut back on them in 2024. The same figure applies to travel, with more than 1 in 2 consumers planning to reduce their spending in this area.
Low-income households will cut back much more on their spending this year
While spending among the French population is set to decline for a large portion of the population, there is a disparity based on income. Not surprisingly, low-income earners are more severely impacted by the purchasing power crisis. In this group, a higher percentage say they plan to cut back on spending in 2024, whether for leisure activities (68% vs. the national average of 56%), electricity (66% vs. 57%), or food (43% vs. 32%).
Conversely, fewer high-income earners will be tightening their belts, particularly when it comes to food (21% vs. the national average of 32%). In fact, many of them will increase their spending in certain categories: 11% of high-income earners will spend more on travel than last year.
Faced with inflation, the French are turning to secondhand goods…
Long considered a niche market, the consumption of secondhand goods has steadily grown over time and, driven by inflation, has quickly become a viable alternative for saving money. In fact, 60% of French people have bought or sold a secondhand item in the past 12 months.
The consumption of secondhand goods, which continues to grow, varies significantly depending on the type of item. Clothing is the dominant category in this market: 77% of French people have already bought or resold an item of clothing, ahead of cultural goods (61%) and toys (57%).
…and also for rentals
Another emerging trend is that renting goods seems to be attracting new consumers every year, and this applies to all types of products. In fact, 19% of French people say they prefer to rent a car rather than buy one, and 18% rent cultural goods (CDs, DVDs, books, etc.).
Renting is also popular for other goods: electronics (16%), clothing (16%), DIY supplies (16%), household appliances (14%), etc. This new consumption trend is being driven by inflation and will be worth watching in the coming years.
