Cross-border shopping is more popular than ever with shops in northern France being particularly popular among Belgians. During the first three months of this year the number of purchases made by Belgians at French stores was up by 70% compared with the first quarter of 2022. The figures come from the retail trade federation Comeos. Dominique Michel of Comeos says that “inflation and rising energy prices are the two biggest factors that are playing a role here. If nothing changes we expect that during the coming months even more Belgians will make purchases abroad”.
During the first 3 months of this year Belgians spent a total of 668 million euro in foreign supermarkets. The lion’s share (423) of this was spent in supermarkets in France. These figures only include physical purchases and don’t purchases made online. The retail trade federation says that there are two main reasons for Belgians’ willingness to cross the border to shop: inflation and the high energy costs here in Belgium.
During the first three months of this year inflation in Belgium was double what it was in France. As wages in Belgium are pegged to inflation through the so-called “trigger index” the amount Belgian supermarkets have to pay their staff has also risen.
The supermarkets have passed this on to their customers and prices have risen accordingly. Furthermore, measures taken by the French government have limited the increase in energy costs for large companies and supermarket. This has meant that supermarkets in France have been able to limit price increases. In Belgium this has not been the case and price differences between Belgian and French supermarkets have increased significantly.
9% VAT
There was already a difference between the prices charged by French and Belgian supermarkets. Many Belgians from areas close to the border have been shopping in France for many years. Inflation and energy prices have served to increase the number of us that are prepared to do at least some of our shopping across the border. Comeos fears that in the coming months even more Belgians will border-hop in search of cheaper groceries.
"The French government has made agreements with food producers to reduce their prices so that from July customers will be paying less for them at the supermarket. Here this is not the case and in this country the government is planning to increase VAT on food from 6% to 9%. Needless to say this will fuel a big increase in cross-border shopping”, Dominique Michel said.
Mr Michel is referring to the ongoing talks on fiscal reform. One of the proposals that are on the table is for one 9% VAT rate rather that the current situation whereby basic products such as milk and bread are taxed at 6% VAT while other food and drink products have 12% VAT levied on them. Also in the proposals is the scrapping of VAT on fruit and vegetable. Dominique Michel says that this will make little or no difference. "No one drives to France to go and buy lettuce and bread. If the price in Belgium falls a bit, you will hardly notice the difference. The big price differences are with meat, fish, drinks, chocolate, biscuits,…These will all become more expensive here”.
Mr Michel also points to a new regional litter tax that retailers will also have to pay. This will cost them 180 million euro/annum and ultimately it will be the customer that picks up the bill.
"Price differences will remain”
The Leuven University Professor of Marketing and Retail Els Breugelmans also expects that more people will cross the border to do their shopping.
"Price increases are usually not followed by equally sharp falls in price. There was already a price differential between Belgium and France. This has now become greater and will remain so. As a result of this more and more people will discover that the possibility is there”.
Many Belgians live relatively close to the border and this mean it takes relatively little effort to make purchases abroad. In the past France, the Netherlands and Germany were about equally as popular. Currently France is by far the most popular country for cross-border shoppers from Belgium.