Gaëlle Le Floch
Strategic Insight Director, Worldpanel Division
Consumption: a wind of revolt
Initiated by the yellow vests movement, which revealed the fractures of French society, a wind of revolt swept over mass consumption in 2018 and 2019. A year of rupture marks the end of hyperconsumption in France.
We are now facing a different consumption model. The end of hyperconsumption, which was the real turning point of 2018, is a trend that is now binding on everyone. All the marketing levers historically activated by mass-market players and major global brands seem to belong to the past in this new atmosphere. Hypermarkets have become the symbols of the “old model” and continue to lose ground as the emphasis shifts from the middle to two extremes: less, but better; or, for economically stretched groups, the inability to buy in volume.
At the upper end of the income scale, price sensitivity is declining. Food prices have been the focus of consumer attention for more than 40 years, but this is giving way to a focus on quality, which is by far the most important criterion for product choice. Consumers remain concerned about food safety and are ready to pay the price for healthier products. Some of them are also willing to pay more to value the work of farmers.
Fragmented consumption: the average consumer no longer exists
We have watched the market for several months now, and it’s clear that the “average” customer in France no longer exists. The yellow vest movement, a marker of a major social divide, has revealed the state of fragmentation of French society, divided according to income level. Lower-income consumers do not share the same expectations of food retail. The emergence of this revolt has also sharply highlighted the famous divide between those who care about “the end of the month” and those—more affluent—who are concerned about “the end of the world.” The end of the “averaging” of French society also explains the phenomenon of fragmentation of consumer practices by brands.
Organic or super promotion, the big gap
On the one hand, we observe households that are financially well off and sensitive to environmental issues: they want organic products but not promos, and make their consumption a sometimes militant act by advocating deconsumption. They frequent organic stores, shop using applications such as Yuka (in 2018, 19 percent of French households used at least one food or hygiene/beauty application) or have ready meals delivered to their homes. They eat less meat—they are therefore flexitarians, even vegetarians—buy their products in short circuits, such as AMAP (the association for maintaining small-scale family farming), or through collaborative platforms such as La Ruche qui dit Oui. More broadly, these consumers are advocates of responsible, ethical and local consumption through alternative distribution channels, compared to traditional hypermarkets. They are in favor of “doing it yourself” (DIY) and their concerns are focused on the environment and health.
More constrained consumers
On the other hand, there is a less urban, more modest population facing severe budgetary constraints. In terms of consumption, this group feels frustrated to have to reduce consumption by obligation: in December 2018, 14.1 percent of households declared they were “not getting by at all” (+5 points compared to 2014). However, this group—unlike its wealthy peers—aspires to consume “like the others,” or even to have a higher purchasing power to consume more: destocking stores and discounts such as Action take advantage of this situation and are highly successful. The rush on Nutella super promotions in Intermarché stores in January 2018 is a great example of this.
“Anywhere” versus “Somewhere”
This gap reflects the tension that exists between the Anywhere group, as sociologist Jérôme Fourquet calls them, for whom successful life means “adapting, changing lives, professions, innovating, travelling,” and the Somewhere group, for whom successful life is “leading a quiet life where you grew up.” For the players in the consumer goods sector, the challenge lies in this dual injunction to which they will have to respond: to address the diversity of audiences and these opposing life models. All this is taking place against the backdrop of recession. With a decline of 0.7 percent in volume, the PGC markets seem to be in a long-term downward trend. This is not much better in value: this year’s increase (+1.2 percent) is one of the worst scores in 10 years.
What’s clear is that when it comes to consumers, and economic headwinds, the era of mass consumption has ended.