FRENCH people are ready to tighten their belts this year, with four out of five saying their spending power fell in 2012 and that the situation was set to get worse.
And a consumer magazine survey found that more than half were going to cut back spending on leisure, holidays and clothing. Some said they would even cut back on food spending to help make ends meet.
Supermarkets are already feeling the effects and retail market specialists Nielsen said sales for the first three months of the year had remained stable instead of seeing the usual rise, prompting a rash of new promotional offers.
On the roads, fuel prices have dropped to a three-year low, with diesel averaging €1.3209 against €1.3593 last week. Petrol has fallen similarly, hitting €1.5250 from €1.5616 for SP95.
Tobacconists are also feeling the pinch as sales fell 8.6% in volume – down 2.5% in value – in the first three months of 2013. It is the first time in 10 years the value of cigarette sales has fallen as any reduction in sales is usually matched by an increase in the price of tobacco. Last year prices were pushed above €6 a pack. It also means less tax money has been gathered as tax makes up 80% of the price.
This is the first time in 30 years that French spending power has fallen and 72% in the 60 Millions de Consommateurs survey blamed rising taxes and rising energy, food and fuel prices. Half of those bringing in less than €1,500 a month said they were struggling to survive.
The government is hoping to revive people’s spending by unblocking access to money tied up in employee benefits and share participation schemes at work, called épargne salariale. People will be able to access up to €20,000 without having to justify purchases or face any tax penalty.