Small trade is not in decline, but in transformation, according to the Economic Analysis Council – Economy

The authorities “are alarmed by the disappearance of small businesses” which “provide local services”, “sometimes take on a public service dimension” and “participate in tourist activity”, note the economists Marie-Laure Allain and Anne Epaulard, authors of this note from the Economic Analysis Council, an organization placed with Matignon. But “despite the difficulties of certain geographical areas, small businesses are experiencing more change than decline”, they believe in their study, which covers retail trade (excluding supermarkets) and certain services (bars, restaurants, to households). In 2019, these activities represented nearly 430,000 establishments and 2.5 million jobs.

Overall, the number of small businesses continued to grow slightly between 2013 and 2019 (+0.7%). But with significant geographical disparities, “between the dynamism of the suburbs” – the only areas where shops continue to grow faster than the population – “and the sharp decline in the number of shops excluding restaurants in rural areas”.

Since “the mid-2010s”, we have also witnessed “a change in the structure” of the sector, with “more bars and restaurants”, still observes the CAE.

Resilient businesses

Questioned by AFP, the sociologist Vincent Chabault, author of “Praise of the store” (Folio), explains this trend by the “progress of meals eaten outside” and “the valuation of the diversity of restaurants” in “the country of gastronomy that is France”.

Conversely, other businesses are suffering. Thus ready-to-wear, footwear and press houses are facing significant difficulties, especially when the stores are “positioned in the middle of the range”, he explains.

Drancy (Seine-Saint-Denis), a popular suburb of 70,000 inhabitants located northeast of Paris, illustrates these various trends. Several businesses have settled there in recent years and a brewery is yet to open its doors.

But the situation of certain small shops in clothing and the press remains fragile there. “Since confinement, it’s been very complicated,” explains Patricia, from the Stéphy-Laure Lingerie store. Same story at the press house, which is “not the priority of households” especially in this period of inflation, according to its manager, Hocine Mahmoudi. After twelve years of activity, he “doesn’t know how long” he will “hold on like this”.

“On the whole, small businesses seem to have resisted both the pandemic crisis and the energy crisis well”, however notes the CAE, which specifies that their financial situation has even “improved” with a number of bankruptcies ” much lower” than that of 2019, before the health crisis.

The authors describe resilient small businesses, capable of adapting to their “competitive environment” whether it is supermarkets or e-commerce.

” Myth “

“The history of modern commerce shows that no format has disappeared: mass distribution as well as platforms have competed with small food businesses but have not made them disappear”, confirms Vincent Chabault.

The “disappearance of small business is a myth reactivated with each commercial revolution”, he summarizes.

In rural areas, however, its disappearance is “really worrying”, according to the CAE, which recommends “targeted” and “locally piloted” measures, judging them more effective than national public policies such as the Action heart of the city device.

In mid-February, the government announced a plan to help set up businesses in villages that lack them. Endowed with an envelope of 12 million euros over 2023, it will support a project up to 80,000 euros for a physical trade and 20,000 euros for an itinerant trade.

This plan is welcomed by the CAE, which warns, however, that profitability will not always be there and recommends the creation of “referent” positions in local administrations, with the mission of helping municipalities develop innovative solutions, as municipal authorities.