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Thursday, October 25, 2007

FRANCE MAY END SUNDAY TRADING CHARADE

France hints at end to Sunday trading charade

By Adam Jones in Paris
Updated: 9:11 p.m. ET Oct 24, 2007

In a city that boasts the Louvre and the Eiffel Tower, a collection of furniture stores and factory outlets on an industrial estate hardly ranks as a significant tourist destination.

However, in order to circumvent a ban on Sunday trading, that was the label given to a dreary retail park in the northern suburbs of Paris, close to the equally-unlovely Charles de Gaulle airport. The Paris Nord 2 complex was classed as a hub of tourist activity in 2004 in order to allow tenants - including Ikea - to resist demands that they shut on Sunday.

Yet France's retailers may have less need of such sleight-of-hand in the future. The government says it might loosen the 101 year-old Sunday trading ban as one way of cheering up gloomy shoppers and accelerating economic growth.

Other measures to liberalise the highly-regulated retail sector are being prepared or mooted. Conscious that food prices are rising - and that consumers already feel poor - the government this week proposed legislation that would give supermarkets more leeway to discount, easing a de facto price control law that was supposed to protect small shops.

A commission asked by the government to suggest ways of spurring economic growth last week outlined other ways in which prices could be forced down and consumer spending encouraged.

Headed by Jacques Attali, the commission proposed that retailers should be allowed to sell items below cost - an idea that was shot down by Luc Chatel, the minister for consumers, who said it could undermine France's petits commerçants.

Much of the pressure for reform is coming from the industry itself. Ikea, Conforama and other furniture retailers are lobbying for a relaxation of the Sunday trading ban.

The stakes are high. Stores at Paris Nord 2 make 30-40 per cent of their weekly turnover on Sundays, says Vincent Bryche of the local mayor's office, which supports Sunday trading because it boosts local taxation and employment.

"Society has changed," says Djamel Belal, who represents traders in the factory outlet centre. People struggle to do all their shopping on weekdays and Saturdays, he says, arguing that since internet retailers are open seven days a week, traditional traders should be able to do the same.

Paris Nord 2 faces a fresh legal challenge over whether the flimsy tourist zone designation merits a blanket get-out. Other shops have had to work harder to open on Sundays: the Champs-Elysées branch of Louis Vuitton stuffed itself with art and argued that it was a cultural attraction.

But help could be at hand. On Tuesday, Mr Chatel said the government sympathised with out-of-town furniture retailers in the Paris region, who have come under attack from one union over Sunday trading. He said ministers would try to sort out this local "emergency" and consult on a broader loosening of the ban that could become law in 2008.

Opposition to any significant liberalisation would be loud, particularly from small shops and unions. But Conforama employees last month took to the streets in defence of seven-day opening, bearing a banner that read "No more Sundays = salaries in danger." Not all French workers want their traditional day of rest.

Copyright The Financial Times Ltd. All rights reserved.

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