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Billions at Stake for Retail as Paris Riots Rage on This Holiday

Each Saturday for the last month, the grand boulevards and picturesque shopping districts of Paris have been transformed into a stage for violent clashes between protesters and the police on a scale rarely seen in western Europe in this decade.

Shop fronts have been smashed and cars and boutiques burned as the gilets jaunes, the yellow jacketed anti-Macron rioters who now flood into the capital from around the country each weekend, do their utmost to disrupt Parisian life.

In Paris two Saturdays ago, the Champs Élysées, Paris’ most famous shopping mile, was entirely blocked off by state police, who forcefully advised locals and visitors to stay at home to avoid getting hurt. The surrounding streets were eerily quiet in the morning; by the afternoon they were filled with tear gas and armored cars.

On Monday, the protestors were gone but a number of shops were still shut, many of them in the process of repairing broken windows and destroyed inventories. Dior had 1 million euro ($1.13 million) in damages at its Champs Élysées store, Burberry and Chanel have suffered from serious looting, and a number of brands including Zara, Sephora and Foot Locker have had their windows smashed on more than one occasion.

Unsurprisingly, the French retail industry is suffering major losses from a month of dismal footfall in the run up to Christmas. The shopping mile around the Champs Élysées generates between 1.5 billion euro and 2 billion euro (between $1.7 million and $2.26 million) in revenue a year. Nearly a quarter of those sales are made in the month of December, and Saturday is the most lucrative day of the week.

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Paris’ top department stores, including Printemps, Galeries Lafayette, the Bon Marche and BHV, have had to shut their doors, and LVMH and Kering have boarded up all their Parisian boutiques on Saturdays until the riots end. They are also closing at 5:00 p.m. on Fridays in preparation for the riots ahead.

“We have lost around 30 percent of our projected December sales,” said Pierre Pelarrey, the director of Printemps. “Of course, on Saturdays, we are losing 100 percent of sales.”

Earlier this week, Finance Minister Bruno Le Maire called a press conference to discuss the negative impact of the protests on the economy, estimating they will cut 0.1 percent from France’s economic growth this year. He said some brands have seen sales plummet by around 20 percent to 40 percent since the demonstrations began.

The Bank of France has cut its growth projection for Q4 by 0.2 percent, citing the impact of protests on retailers. Shop closures and disruptions have so far cost more than 1 billion euro, according to French Federation of Commerce and Distribution.

Parisians are staying at home—but even more damagingly, tourists are staying away. “Paris cannot cope with another weekend on lockdown,” said Valérie Pécresse, a government spokesperson. “People have the right to protest but they do not have the right to take the capital hostage. December is an important moment for tourism and these demonstrations are becoming extremely damaging.”

The numbers reflect this. Hotels are reporting up to 50 percent lower occupancy rates compared with this time last year, as certain establishments such as the Hyatt Regency log 2,000 cancellations a week. Given how much visitors spend on shopping, this is extremely damaging.

The retail industry is attempting to fight back. Shops in Paris are traditionally closed on Sundays, other than in specific areas, like the Marais. But as a result of the protests, many of them are opening on Sundays—when the gilet jaunes have departed—in an attempt to reclaim their lost revenue.

“Shops are trying their best but there are not many people out on the streets,” said a spokesperson from the Fédération Française des Associations de Commerçants. “Shopkeepers and brands need more information before they make decisions about when and how to open. This is the most important month of the year for full-price sales in Europe. If we lose revenue now, before the January sales, it will cause major problems for the year ahead.”

The only potential winners from this crisis are e-commerce stores. Rakuten, a Japanese electronics site with a large presence in France, reported a 65 percent rise in French sales last Saturday. Amazon doesn’t publish purchases by country, and has refused to comment, but is most likely seeing similar returns.

But there is some hope for brick-and-mortar retailers. After conciliatory speeches and tax concessions made by Macron this week, this coming Saturday, Dec. 15 is set to be slightly less violent—although most luxury groups, including LVMH and Kering, have confirmed all their boutiques will remain closed.

And while this is a major set-back for the tourism and retail sectors, as the horrific terror attacks of the past have shown, Parisians rarely remain ruffled for long—and tourists usually have short memories when it comes to the City of Light.