Electrical Goods Retailing - France - February 2016


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Mintel

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The retailing of electricals in France is extremely challenging. The market is sluggish, with the main growth area, telecoms, subject to ongoing price deflation. Online retailers, notably Amazon, are increasing their market share and two major players, Darty and Fnac, are about to embark on a defensive merger. Store-based retailers need to work hard to remind consumers that shopping is about more than just price.

Table of Content

Overview

What you need to know
Areas covered in this report

Executive Summary

The market
Spending and inflation
Figure 1: France: Consumer spending on electrical items (annual % change in volumes, 2010 prices), 2010-14
Channels of distribution
Figure 2: France: Estimated distribution of spending on electrical/electronic goods, 2015
Sector size and forecast
Leading players
Key metrics
Market shares
Figure 3: France: Leading specialist electrical retailers: Shares of spending on electricals items, 2015
Online
The consumer
Where they shop
Figure 4: France: Where they bought electrical goods in the last 12 months, in-store versus online/catalogue, January 2016
Levels of satisfaction
Figure 5: France: Levels of satisfaction with last electricals retailer purchased from, January 2016
What we think

Issues and Insights

What does the Fnac/Darty deal mean?
The facts
The implications
How can store-based retailers respond to the rise of Amazon?
The facts
The implications
The Market – What You Need to Know

Economy weak but spending picking up
Electricals market impacted by falling prices
Specialists dominate distribution, with the big players growing share
Hypermarkets losing non-food sales but online expanding fast
Specialist electricals retailers standing firm
Countering competition from online

Spending and Inflation

France’s economy a weak spot in the eurozone
Consumption and purchasing power regaining momentum
Electricals market buoyed by telecommunications
Figure 6: France: Consumer spending on electrical items (incl. VAT), 2010-15
Figure 7: France: Consumer spending on electrical items (annual % change in volumes, 2010 prices), 2010-14
Inflation
Figure 8: France: Consumer Prices, Annual % change, 2011-15
Figure 9: France: Consumer price inflation on electrical items, annual % change, July 2014-December 2015
Unit volumes
Figure 10: France: Main Electricals markets, spending (inc VAT) 2011-19

Channels of Distribution

Specialists dominate
Grocers important, but in decline
Online taking market share
Department stores most significant in Paris
Figure 11: France: Estimated distribution of spending on electrical/electronic goods, 2015

Sector Size and Forecast

Specialists have proven resilient
Standing up to the threat from online players
Figure 12: France: Electricals retailers’ sales, excl VAT, 2010-15
Subdued growth on the horizon
Figure 13: France: Electricals retailers’ sales, Forecasts, excl VAT, 2016-20
Figure 14: France: Electricals retailers’ sales as % of all spending on electricals, 2010-15

Leading Players – What You Need to Know

A mature market, with consolidation on the cards
Darty the market leader
Top groups growing combined share
French online market at a medium stage of development
Amazon leads, but Fnac, Darty and Boulanger all big online

Leading Players

The triumvirate of Darty/Boulanger/Fnac
The Darty/Fnac merger
Integrating online, with marketplaces a key driver
Expanding physical stores too
Furniture/electricals combo retailers also strong
Independents in decline
Figure 15: France: Leading specialist electrical retailers: sales, 2012-15
Figure 16: France: Leading specialist electrical retailers: Outlet numbers, 2012-15
Sales per outlet
Figure 17: France: Leading specialist electrical retailers: sales per outlet, 2012-15

Market Shares

Fnac has larger sales but Darty is leader in electricals
Top groups growing combined share
Conforama and BUT also important
Figure 18: France: Leading specialist electrical retailers: shares of spending on electricals items, 2012-15

Online

France at a medium stage of development
Online activity
Figure 19: France: Online buyers of electrical items in last three months, 2011-15
Online sales
Leading online players
Figure 20: France: Top retail sites by number of unique visitors, October-November 2015
Figure 21: France: Estimated sales of electricals online by leading retailers, 2014

The Consumer – What You Need to Know

Men and younger age groups most likely to buy
Specialists most popular, but online catching up
Amazon and Darty lead the market
Consumers are satisfied with product-related issues
But less satisfied with services

Who is Buying?

More men than women
Figure 22: France: Purchasing of electrical goods in the last 12 months, by gender, January 2016
More younger people than older
Figure 23: France: Purchasing of electrical goods in the last 12 months, by age, January 2016

Where they Shop for Electrical Goods

Specialists popular but online now ahead of the grocers
Amazon and Darty now level-pegging overall
Figure 24: France: Where they bought electrical goods in-store or online in the last 12 months, January 2016
Amazon dominant online
Figure 25: France: Where they bought electrical goods in the last 12 months, in-store versus online/catalogue, January 2016
Average age and affluence
Figure 26: France: Where they bought electrical goods, by age and income, January 2016

Levels of Satisfaction

Satisfaction higher on product than service related aspects
Figure 27: France: Levels of satisfaction with last electricals retailer purchased from, January 2016
Satisfaction with specific retailers
Darty
Figure 28: France: Those agreeing they were satisfied at Darty relative to electrical retailer average, January 2016
Fnac
Figure 29: France: Those agreeing they were satisfied at Fnac relative to electrical retailer average, January 2016
Amazon
Figure 30: France: Those agreeing they were satisfied at Amazon relative to electrical retailer average, January 2016

Amazon Europe

What we think
An evolving offer
Amazon Prime extends its breadth and reach
A sense of occasion
Product development continues
Delivery gets quicker, but pushes fulfilment costs higher
Click & Collect points limited to US universities
Looking ahead
Company background
Company performance
Growth slows in Europe
Figure 31: Amazon.com Inc: Group financial performance, 2010-15
Sales mix
Figure 32: Amazon: Composition of net sales, 2015
Retail offering

Apple Retail

What we think
It’s all about the iPhone
The importance of innovation
Apple stores an important to success of the brand
Company background
Company performance
Worldwide
Figure 33: Apple Retail: sales and operating profit, 2011-15
Figure 34: Apple Retail: Outlet data, 2010/11-2016
Apple Retail UK
Figure 35: Apple Retail UK: Group financial performance, 2009/10-2014/15
Figure 36: Apple Retail UK: Outlet data, 2010/11-2016
Figure 37: Apple Retail: European stores, 2014-16
Retail offering

Boulanger/HTM Group

What we think
Targeting high population urban locations
Latest stores adapted to the digital age
Adapted well to online
Company background
Company performance
Figure 38: HTM (Boulanger): Group sales performance, estimated, 2011-15
Figure 39: HTM (Boulanger): Outlet data, 2011-15
Retail offering

Darty Group

What we think
Fnac takeover deal
Digital strategy
First-to-market edge over rivals
Marketplace widens product offering and enhances price perception
Rolling out bespoke fitted kitchens offer into more stores
Capitalising on consumer demand for connected technology
Customer services offer
New store card with upgraded credit offering and loyalty benefits
Company background
Company performance
Figure 40: Darty Group: Group financial performance, 2010/11-2014/15
Figure 41: Darty Group: Outlet data, 2010/11-2014/15
Retail offering

Euronics International

What we think
Company background
Company performance
Figure 42: Euronics International: Group financial performance, 2010-14
Figure 43: Euronics International: Outlet data, 2010-14
Euronics membership
Figure 44: Euronics: Members, countries and trading names, 2016

Expert Europe

What we think
The up-sides
The downsides
Company background
Online
Figure 45: Expert International, online shopping availability, 2016
Company performance
Figure 46: Expert Europe: Estimated sales at retail, excl. VAT, 2011-15
Figure 47: Expert Europe: Outlet data, 2011-15
Expert Germany
Expert Italy
Expert Spain
Expert France
Retail offering
Store formats

Fnac

What we think
Darty deal
Fnac Kids roll-out completed
Aiming for market leadership in the fast-growing connected devices sector
Expanding its digital cultural offering
Enhanced marketplace offering puts it in direct competition with Amazon
Company background
Company performance
2015
Figure 48: Fnac: Group financial performance, 2010-15
Figure 49: Fnac: Outlet data, 2010-15
Retail offering

Appendix – Data Sources, Abbreviations and Supporting Information

Abbreviations
Data sources

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