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French retail market in disarray

Published:  23 July, 2008

French consumers revolt against high average basket costs

Liberalisation of France's strict retail laws looks likely after a public outcry over high average basket costs, analysts Verdict Research said in a report.

This could lead to a change in the status quo in French retail, which remains more fragmented than the European norm.

Strict laws have made it difficult for retailers to grow their operations and have curbed the opening of new retail space.

This has led many foreign players, including Tesco, to exit the country.

Reform of the "Galland law" - which hinders price competition by letting suppliers set a price floor - could spark a price war among French retailers.

The move could also speed up the growth of private label, which has lagged behind the rest of the EU.

In the UK, Whitehall and the Scottish Executive are researching the possibility of introducing a national minimum pricing scheme to force retailers to increase their alcohol prices in a bid to curb binge drinking.