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British chain Marks and Spencer may close Paris stores after Brexit supply chaos

The British retail chain Marks and Spencer is reported to be closing its Paris stores after Brexit-relayed supply problems lead to months of empty shelves.

Published: 13 September 2021 09:18 CEST
British chain Marks and Spencer may close Paris stores after Brexit supply chaos
Photo: Alain Jocard/AFP

Ever since the end of the Brexit transition period in January 2021, shoppers in Paris have been reporting empty shelves in Marks & Spencer’s popular Paris food stores.

Now the company says it is placing its European operation under review, with British newspapers reporting that the chain is likely to close its Paris stores.

The company has not commented on reports of closures, but said in a statement: “In light of the new customs arrangements, we are taking decisive steps to reconfigure our European operations and have already made changes to food exports into the Czech Republic.

“We operate a franchise business in France and are undertaking a review of the model with our two partners.”

Marks & Spencer closed its French clothing stores in 2001 but in 2010 returned to Paris with a number of smaller Food Hall stores selling British produce, which have proved popular both with British residents in France and with Parisians.

There are now 20 Marks & Spencer Food Hall stores in France; one in Lille and the rest in Paris and its suburbs.

The company faces a particular challenge in the post-Brexit world as its European stores are supplied from the UK – and one of its selling points for Brits abroad is that the sandwiches and ready meals are identical to those in the UK.

Dozens of customers posted photos on social media of empty shelves in Paris M&S stores in January and February, and although the situation seems to have improved slightly since then, the store is also selling an increasing number of French products.

Company chairman Archie Norman has repeatedly warned of problems caused by the UK’s decision to leave not only the EU but the single market and customs union as well, meaning that all foodstuffs imported from the UK face strict health regulations.

Back in August 2018 he told the Financial Times: “If our lorries are sitting in a lorry park near Dover for half a day, that would be the demise of the great M&S sandwich in Paris.”

The news was greeted with dismay by Brits living in Paris, who rely on the store for little tastes of home.

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JOHN LICHFIELD

OPINION: France’s economy is far from doomed, but not quite booming either

Depending on who you ask, France's economy is either booming or doomed - John Lichfield takes a look at who is right and where French finances are heading.

Published: 15 May 2024 11:12 CEST
Updated: 18 May 2024 11:17 CEST
OPINION: France's economy is far from doomed, but not quite booming either

France is booming. France is also doomed. Take your pick.

On a much-visited French news site Le Figaro this week, consecutive stories collided head on.

The first story reported that the annual ‘Choose France’ conference will bring a record number of foreign investments to French soil in 2024 (56 projects worth €15 billion). France is the most attractive country in Europe for foreign investment for the fifth year in succession.

The second story – an essay by the political commentator and pollster JĂŠrĂ´me Fourquet – said that the French economic model of the last 40 years, had “reached the end of the road and left the country in a cul-de-sac”.

France no longer “made anything”, the essay said. The economy was being kept alive by state and consumer spending, funded unsustainably by twin deficits of trade and public finance.

Which is true? Both, up to a point.

The Choose France foreign investment conference in Versailles this week will be the most successful since President Emmanuel Macron launched the project six years ago. France opened 200 more factories than it closed last year, returning to a modest trend of “re-industrialisation” interrupted by the Covid and Ukraine crises.

Jérôme Fourquet’s essay was brilliant but also over the top. It ignored some of the positive developments in France of recent years.

It suggested that France “made nothing” but also admitted that the country was a world leader in arms, cosmetics, perfume, luxury goods and wine.

France, Fourquet might have added, is also one of the world’s largest exporters of cereals. It holds a major part of Airbus, the world’s most successful plane-maker. Unlike the UK, it is still a train-maker and a car-maker, although both industries have declined.

All the same, the essay made good points about the “French model” created unconsciously over four decades by governments of Right and Left and only timidly changed by Emmanuel Macron’s Centre in the last seven years.

Fourquet defines the French model as “state-consumerist”, a mixture of excessive public spending and taxation and generous pensions and welfare payments which allow most French people to live reasonably well. Unfortunately, the high taxation is never enough to cover the public spending and the consumers consume more from abroad than the country exports.

The result is twin, expanding deficits in public spending and the balance of payments which cannot be sustained indefinitely.

In 2003, France’s accumulated state debt was the equivalent of 63 percent of annual GDP. It is now 110 percent of GDP. The annual service charge is about to overtake education as the single biggest item in the state budget.

In 2006, France’s trade deficit was €4.3 billion. In 2023, it was €99.6 billion (admittedly inflated by the high cost of oil and gas).

Fourquet says the cost and bureaucratic weight of the French state make creating businesses – and wealth and jobs – more difficult than in other EU countries. This is covered up by more state spending which, in turn, sustains consumer spending which, in turn, boosts the twin deficits. A vicious spiral.

He concedes that Macron has tried to chip away at the state in the last seven years. The President has also splashed the cash on pet projects and has done little to reduce the regulatory burden.

Rather than lighten the entire system, Macron suspends rules and norms when he wants to get stuff done (such as the rebuilding of Notre Dame cathedral). The success of his foreign investment drive is also partly based on “keys in hand” offers of low or no-regulation factory sites which are not always easily accessible to domestic investors.

Some of those criticisms are justified. Macron has not been the revolutionary that he promised to be in 2017. He has been a plodding state reformer, extending with some success the job-friendly policies introduced by President François Hollande. France being France, neither man gets any credit.

There are signs that the economic downturn late last year (and the explosion in the budget deficit) may have been a temporary set-back as Macron insisted. Growth in the first three months of this year exceeded expectations at 0.2 percent of GDP. Jobs are being created again. (More than 1 million extra jobs since pre-Covid days).

High energy costs are crippling business across Europe but they are lower in France than elsewhere. The boom in foreign investment in France has tended to be high in value but low in jobs. The industrious and energetic minister for industry and energy, Roland Lescure, says that is now changing.

One of the projects under discussion at Choose France is a home-grown plan for a €1.6 billion solar panel factory in the Rhône delta which would create 12,000 jobs.

So is it boom or is it doom?

Neither. There has been a gradual, positive shift in the French social-economic model in the last seven to ten years which JĂŠrĂ´me Fourquet plays down or ignores.

Macron promised to do far more but he has had to surmount to two international crises (Covid and Ukraine) and to adjust to two domestic revolts (Yellow Vests and pensions reform). His unpopularity is partly explained by his failure to sell a convincing narrative of reform; it is also explained by France’s obsession with “reform” (in the abstract) but hatred of all “reforms” (in detail).

But what are the alternatives? All the opposition forces, from far-left to far-right, offer policies which would preserve or worsen an unsustainable status quo.

Macron’s final three years are unlikely to achieve much in the way of new reforms. A recovery of the economy might warm attitudes to Macronism (a big ask) and allow his would-be successors in the Centre to block Marine Le Pen in 2027.

Otherwise, Le Pen’s zombie economics – extra spending, no new taxes, breaking the European single market – could tip a heavily indebted France into the abyss.

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