Market
Despite the collapse of economic growth in the fourth quarter of 2008 and first quarter of 2009 (both -1.4% quarter-on-quarter) France was one of the first countries in Europe to resume growth, in the second quarter of 2009, achieving quarter-on-quarter GDP growth of 0.3%. With strong balance sheets in the corporate and banking sector, the French economy proved to be resilient. The government boosted the recovery with fiscal and monetary measures, which helped support the ailing automotive industry in particular. Thanks in part to the level of government support, the recession was less steep than in many neighbouring countries and in the Euro Area as a whole. GDP fell 2.2% in 2009, less than the EU average. France was one of the very few European countries where domestic demand was resilient: private consumption slowed markedly but remained positive (0.8%). Despite France being relatively successful in weathering the storm in the European context, the labour market did not benefit. France’s unemployment rate of 9.4% in 2009 (2008: 7.8%) was in line with the Euro Area average. Inflation in 2009, meanwhile, averaged only 0.1% (2008: 3.2%) and some months even witnessed slight deflation. Despite positive consumer spending growth, retail sales slipped 1.6% from the previous year; in terms of volume, the contraction was 0.7%. Despite the weakening economic climate, demand for retail space remained relatively resilient. Although in general demand weakened somewhat, there were still new openings and retailers willing to enter the market or expand. The focus is on obtaining good quality locations, which, like in the Netherlands, is leading to a greater division between primary and secondary locations. There was some mild downward pressure on rents during the year and the use of incentives became more common.
Source: Annual Report 2009, Chapter Review of Operations, page 55 (PDF, 6.362 kB)
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