And it’s far from over has already warned Michel-Édouard Leclerc, who predicts a real “tsunami” for next March. In question ? Negotiations currently underway with manufacturers, which should be completed in February. Whether in the food industry, hygiene products or drugstores, the explosion of costs is undermining the profitability of factories. The food industry is a very large consumer of energy.
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Some groups have seen their energy bills multiplied by five, even ten! For some companies, the only solution is to (partially) shut down production. This is particularly the case of the Cofigeo group (William Saurin, Garbit, etc.) which announced the cessation of production in four of its eight factories, i.e. 80% of its production.
Negotiations between suppliers and large retailers therefore promise to be tense. Increases of 10 to 20% are mentioned, but distributors are trying to put pressure on manufacturers, in the name of consumer purchasing power. However, we see that the price of private labels increases more strongly than that of national brands, proof of a pass-through of costs, hoping that this is not an opportunism to increase margins.
National brands know that they must make an effort to preserve a minimum of competitiveness, but they cannot for all that lower themselves in front of the distributors at the risk of producing at a loss. Many companies are indeed in the red and have no choice but to reduce their production pending successful negotiations with distributors.
If there is no shortage yet, some references might run out in the coming weeks.
