Retail in France: In search of lost innovation

​The slight pick-up of inflation (+1.1% expected in 2017) and acceleration of consumer spending (+2%) may offer retailers a one-time opportunity to boost pricing power eroded by three years of an intense price war. 

EBIT plunged in 2015 and 2016 to 3.7% and 2.6% respectively while net gearing soared to 95%. This hindered French companies’ ability to adjust their offers to satisfy digital-ready consumers.

Grocery, pure-players and organic segments are expected to resist better while the apparel segment might come under further strain.