French retailers brace for weak Christmas sales amid protests

Along wide Parisian shopping boulevards, early Christmas lights glow around security grilles and boarded-up windows as stores brace for a third weekend of unrest that has already cost an estimated $2 billion in damage and lost revenue.

Weeks of demonstrations against rising costs and worsening living standards have spiraled into violence and looting in several French cities, damaging 2,400 stores across the country, according to the French Chamber of Commerce.

With further protests planned on October 31 and November 5, the mood among Parisian retailers and consumers is anything but festive.

French consumer confidence fell to a 13-year low this month. That bodes ill for November and December, which together typically account for 40% of annual retail turnover.

"It’s important to realise that economic life has been completely paralyzed," said Alain Di Crescenzo, president of the French Chamber of Commerce, about the days of protest.

Over a quarter of the outlets damaged during protests remain shut, Di Crescenzo told Reuters, and many stores are likely to be shuttered protectively ahead of the next protests.

Shops targeted included outlets from major luxury brands like Hermes, Louis Vuitton and Burberry, but also Carrefour supermarkets and corner shops.

The Chamber of Commerce estimates losses to retailers to exceed €1 billion ($1.1 billion), while Morningstar DBRS said the total could approach $2 billion including uninsured damage and lost revenue, and rise further if protests escalate.

Besides the direct impact on looted stores, fears of further violence drove many more to close as a precautionary measure, turning major shopping streets into ghost towns ahead of the October 24 protests, during which security was tighter but 50 stores were still broken into.

Prime Minister Sebastien Lecornu has promised government support to businesses to prevent losses during the holiday season. The government has announced aid of up to 10,000 euros for stores impacted by the October 17 protests.

In front of Paris’ shopping district, crowds walked by boarded up department stores and shops usually featuring neat storefronts.

“Having storefronts barricaded is a major issue, as it blocks the view into the shops. People don’t want to enter a store if they can’t see the products inside,” student Roxane Gastaud said.

Architecture student Arthur Laranjeira said, though, that he felt saying people are being deprived of their weekend shopping is “a bit individualistic and selfish” because student protesters have “genuine demands.”

Pensioner Marie-Claire Gracia said that beyond the shop damages and closures, the real worry to the French economy is its debt.

“It’s the management of the debt that raises questions for me,” she said.