PARIS — Glittering with Christmas decorations, Galeries Lafayette, a famed department store in central Paris, typically draws up to 80,000 visitors a day during the holidays.
But on a recent weekday morning, an uncharacteristically small crowd browsed designer clothes and artisanal chocolates in the grand halls. Employees smiled and pointed to discount signs, though few were ringing up sales.
In front of the store, Gabriel Vassor, a barista, tried to lure customers to his sidewalk coffee stand with free cookies, to no avail. “Revenue is 40 percent lower than what it should be at this time of year,” he said, as harried pedestrians marched past. “We’re taking a big hit.”
As France heads into a third week of rail and subway strikes over a planned overhaul of the country’s pension system, the nation’s economy, Europe’s second largest after Germany, is beginning to feel the bite. After the government and French unions failed to reach an agreement on Thursday, there were few signs that the gridlock was about to let up.
In Paris and other cities where protests have brought half a million demonstrators into the streets, consumer spending is down. Restaurants and retailers face staff shortages as employees spend hours trying to get to work, if they can make it at all.
Trucks sit in hundreds of miles of traffic jams outside major cities, on highways choked with drivers who normally would be taking a train, delaying deliveries of items like TVs and toys. Tourism is starting to slide, especially in Paris, leaving restaurants, shops and hotels short of free-spending clients.
Around three-quarters of Paris-area business owners plan to freeze hirings that were set to begin in January because of a loss of economic activity, MEDEF, France’s main employers association, said this week.
“It’s a catastrophic situation,” said Bernard Stalter, president of the National Chamber of Trade Crafts, which represents small businesses and artisans across France. If the gridlock persists, he added, the hit to the economy — and jobs — could worsen.
The risk grew more pronounced after Philippe Martinez, the head of the combative Confédération générale du travail, said Thursday that members of his union, which includes train drivers, port dockers and electricity workers, would keep striking during the holidays. The union, which counts 650,000 members, plans another round of nationwide demonstrations on Jan. 9.
Lawyers, police officers and hospital workers joined protesting throngs this week to oppose President Emmanuel Macron’s plan to simplify a complex national pension system that is one of the most generous in the world.
It is a sensitive time for the economy, since retailers and other businesses make a good portion of their annual profit during the holidays. Businesses had already tallied losses from the Yellow Vest protests that swept the country last December. But this time, merchants claim, the impact is more widespread.
Bruno Le Maire, the finance minister, has insisted that the harm to France’s economy would be limited, since the strikes are mainly hitting cities that depend on public transportation, not the whole country. The central bank last week trimmed its 2020 growth forecast to 1.1 percent from 1.3 percent — not because of the social movement, but owing to trade tensions and a weak global economy.
While the government may provide some financial aid to small businesses affected by the protests, Mr. Le Maire said, “our historical experience is that these movements ultimately weigh little on the growth of the economy.”
Try telling that to businesses recording big losses.
Fabien Bouthier, the owner of Roi de Sicile Rivoli, a boutique hotel that opened in June on the rue de Rivoli in Paris, was counting on making 200,000 euros this month. But nearly half the bookings at his 21-room hotel, with a marble entrance, a spa and a speakeasy-style bar, have been canceled by customers worried about transport problems, he said.
The hotel and restaurant industry is among the hardest hit from the strikes, with business down 40 to 50 percent since the movement began on Dec. 4, according Synhorcat, the industry’s trade association. In Strasbourg, home to France’s biggest Christmas market, 70 percent of hotel bookings have been canceled because of reduced nationwide train schedules, the group said.
Some of Mr. Bouthier’s employees can’t make it in easily, so he pays for them to take Uber. He invested €5,000 in Christmas decorations, but he won’t be making that money back, he said. “The only solution is to stop the strikes,” he said. “The government must put out the fire.”
Around 80 percent of small and midsize businesses are reporting financial losses from the strike, with half saying they will not be able to make up for lost sales, according to the Confederation of Small and Medium-Sized Enterprises. Those affected have seen sales slump around 30 percent, and by up to 60 percent or more in Paris, Strasbourg and Marseilles.
At Psyche, an upscale jewelry boutique in the Marais district of central Paris, the owner, Chantal Clauriel, typically makes €1,500 to €3,000 in sales a day at this time of year. But as commuters remained caught up in the strikes, she earned only €68 all of last week, she said.
Her husband, who runs the Barbier de Monge hair and beard styling salon in Paris’s Fifth Arrondissement, hasn’t been spared either. He and two other stylists typically see 40 clients a day; since last Wednesday, the visits have slumped to four or five a day, she said.
Ms. Clauriel’s biggest worry is that she won’t be able to sell unsold stock in the new year, when protests are expected to begin afresh, seriously crimping her margins. “It has had an enormous economic impact,” she said.
Beyond Paris, transport bottlenecks are putting pressure on supply chains. In Hautes-de-France, an industrial region that stretches north of Paris to Calais, half of businesses surveyed by the Chamber of Commerce and Industry reported delivery delays for goods as varied as store merchandise and construction materials, said David Brusselle, the organization’s general director.
Moving merchandise by truck or rail has become extremely complicated as train conductors walk off the job, and drivers face blocked warehouses and maritime ports. The blockages are starting to hurt imports and exports because goods can’t easily be moved, Mr. Brusselle added.
Julien Depaeuw, the general director of Groupe Depaeuw, one of the biggest logistics and transport companies in the region, said some of his truck drivers faced an extraordinary hurdle to deliver on time because traffic jams risked pushing them over the hours they may legally drive in a day.
“A one-hour drive can easily turn into three hours, and if you go over the limit, you have to stop driving for at least nine hours,” said Mr. Depaeuw, whose company transports all manner of goods for major French retailers. “That stops us from doing our jobs.”
That troubles merchants around the country.
Laurent Durain, a fishmonger at the Marché d’Aligre, one of Paris’s oldest and most vibrant food markets, was worried that the salmon he had ordered from Scotland for the Christmas rush wouldn’t make it.
“If the refrigerated trucks are delayed by traffic and run out of gas, the refrigeration system stops and the authorities order the contents disposed of,” he said. Mr. Durain had ordered 1,200 oysters, and hired six additional helpers to shell them during the holidays.
“If business is down and people don’t show up, I’ll have to pay the help anyway,” he said.
Near his stand, a crowd gathered as Agnès Panier-Runacher, deputy minister for economy and finance, toured the market to hear people’s grievances and offer government help.
Valérie Quelen, the owner of a small framing boutique, elbowed her way to the front. Small businesses like hers are already struggling, she said angrily.
“Now the pension reform is being pushed forward at Christmas, just when we were hoping to be able to set some money aside,” she added. “How will be able to pull through?”
Mélissa Godin and Daphne Angles contributed reporting from Paris.
Source link Google News