Paris to curb out-of-town hypermarkets

MARY DEJEVSKY

Paris

France is to restrict the expansion of the vast shopping centres that ring cities. The move is an about-face for a country which pioneered US-style malls in Europe and has the highest ratio of hypermarkets to inhabitants - 1.5 to 100,000.

The measures, set out in Bordeaux yesterday by the Prime Minister, Alain Juppe, reflect belated concern that consumer giants like Carrefour and Continent are driving small shopkeepers out and causing the decline of town centres. They also reflect the belief of the government that small businesses, "the backbone of the economy", can be a driving force for jobs and training for young unemployed people.

Among the Juppe proposals are strict planning conditions for out-of-town hypermarkets, to comprise an assessment of the local commercial impact as well as environmental considerations; national approval for very big developments and the outlawing of certain practices deemed anti-competitive.

There are also to be tax and tariff concessions for businesses with fewer than 500 employees, cheaper loans, a reduction in electricity charges, and less paperwork for new businesses. But Mr Juppe refused to give small businesses what they most wanted: the abolition of the local business tax. He also threatened statutory measures if there was no voluntary increase in jobs and training places for the young.

Mr Juppe revealed his plans at a congress of small and medium-sized business representatives in Bordeaux, where he is mayor. The venue was partly a reflection of the city's strong commercial tradition, but it also offered an olive-branch to people in Bordeaux who have complained that Mr Juppe's other obligations mean that he neglects their interests.

France has lagged behind Britain in acknowledging the effects of hypermarkets, and although constraints were tightened by Edouard Balladur when he became prime minister in 1995, development continued. Until recently, the strength of local commerce had tended to obscure the fact that families were forsaking their towns to shop in hypermarkets.

In recent months, protest movements have grown. Shopkeepers have staged protests; the bakers' federation has mounted a "Buy local" advertising campaign , and there has been a revival of the militant Poujadiste movement of the Fifties, with violent incidents in Montpellier and Bordeaux.

While catching a popular mood, the measures also represent a shrewd and even necessary political decision by Mr Juppe. With much of France disrupted by transport strikes and a new round of public-sector protests planned through the rest of this week, the Gaullist-voting small-business constituency is one the government needs to keep on its side.

The practical effect may not be as great as either government or small businesses hope. Price may not be quite such a factor for French consumers as it is for those elsewhere in Europe, and affection for small shops and local suppliers may be greater, but price is important. Consumer spending fell by 4 per cent in October, and there are predictions of a "catastrophic" Christmas. It seems the French need incentives not just to use local shops, but to buy anything beyond what they need.