Key Takeaways
- France's retail sales excluding automobiles grew by 0.8% month-on-month in July 2026, doubling the previous month's growth of 0.4%.
- Household consumption of goods rose by 0.5% in volume during the same period, marking a second consecutive month of expansion.
- The retail sales index reached a historic high of 109.7 points, signaling resilient domestic demand despite broader economic uncertainty and fiscal pressures.
French retail sales excluding the automotive sector surged by 0.8% in July, according to the latest data released on September 22, 2026. This performance significantly outperformed the revised 0.4% growth recorded in June, suggesting a strengthening of consumer appetite during the peak summer season.
The broader measure of household consumption of goods also showed positive momentum, increasing by 0.5% in July. This growth was supported by a 0.5% rise in manufactured goods and a 0.2% uptick in food consumption. Energy consumption saw a notable 0.8% increase, driven in part by higher electricity usage during regional heatwaves in early July.
The National Institute of Statistics and Economic Studies (INSEE) reported that the retail sales index hit 109.7 points, its highest level since record-keeping began in 1999. This milestone comes as a surprise to some analysts who had anticipated a more muted outlook due to the government's recent decision to cut its 2026 GDP growth forecast to 0.5%.
While the retail sector remains a bright spot, the wider French economy faces headwinds from political uncertainty and a widening budget deficit. Major French retailers and consumer-facing companies, including Carrefour (CA) and LVMH (MC), are closely monitoring these trends as the country approaches a critical election cycle.
Market sentiment remains cautious as the European Central Bank (ECB) continues to track inflation expectations, which remained largely unchanged in August. Despite the strong retail figures, the manufacturing sector continues to struggle, with output falling 0.8% in July, highlighting a persistent divergence between services-led consumption and industrial production.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.