[Analyze] The six major challenges facing retail in 2024

In the U.S.A., instead of a predicted recession, 2023 finally ended with a G.D.P. rise of 3.1%. The economy benefited from a resilient job market and buoyant consumer spending, despite a property sector at the lowest level for 30 years. The U.S. economy is expected to grow by about 1% in 2024.

The European economy is slowing. In France, the economy increased by only 0.9% in 2023, after a recession in the second half of the year (INSEE) and growth rates of 2.5% in 2022 and 6.4% in 2021. INSEE is forecasting sluggish growth of 0.2% over Q1 and Q2 2024, despite an improvement in inflation and steady business investment.

France: Food volume down 5.2% in two years, e-commerce slowing

In France, 2023 was the 2nd consecutive year of falling volumes in grocery stores, by 3.1% in 2023 after a fall of 2.2% in 2022. That’s a 5.2%-drop in two years. Against a backdrop of food inflation of over 21% between 2021 and 2023, consumers are continuing to make choices in favor of essential products. Last year, we saw an unprecedented wave of consolidations, with the cards largely reshuffled in the supermarket sector. Casino collapsed (with a debt of €7.4 billion at the end of July 2023), Carrefour took over Cora, and Auchan and Intermarché are now taking over the former Casino supermarkets. These consolidation moves will now have to be “digested”, IT systems merged and a refocus on the best business models.

In France, specialty retail has also experienced difficulties, due to weak demand and high levels of debt, in a context where money has become more expensive. The D.I.Y. market decreased by 13% in volume terms in 2022 (Inoha) and companies such as Made.com and Habitat closed.…