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Black Friday, Yellow Vests, Red Retailers

29 November 2018 by jbchevrel

Auchan Holding (AUCHAN) widened +20bp as “Yellow Vest” protests led to an aggregate -18% fall in consumer goods sales at main French retailers last Saturday (Black Friday weekend) compared to the average of Saturdays since the beginning of September. It had fallen -35% the previous Saturday. Number of shops were shut, some others were open but the access to it was blocked by the demonstrations and some others were short of supply because of disruption at depots. AUCHAN was thus the worst performing name in the iTraxx Main s30, clearly wider than the second worst retailer Carrefour (CAFP) +5bp. This was the biggest move in more than 2 months on CAFP CDS, as this name tends to be quite low beta. Its shares also dropped -2.0%, while the CAC Index was up +0.5%. November will prove very challenging for French consumer spending, compared to October. Indeed, October data out this morning surprised on the upside (0.8% MoM vs 0.6% MoM exp). Yellow Vests could have an impact on the French economy if those last, as December is a key month, given the Christmas shopping period.