2023-08-30 04:45:00
If the peak has passed, the decline is delayed. In this new school year, food inflation remains at a very high level in France, at 21% over two years according to the Circana institute. In question, in particular, the annual rhythm of negotiations between large retailers and the agri-food industry, which limits tariff adjustments when the prices of raw materials fall. Thus, since June, France has posted a higher food inflation rate than the rest of Europe, according to Eurostat.
This is why Bruno Le Maire summoned all the players in the sector to Bercy this week. The Minister of the Economy wants to expand the list of products in the anti-inflation offers of supermarkets and encourage manufacturers to contain the surge in prices. Especially since the flight of consumers is accelerating. Over one year, the major national brands saw their sales volumes plummet by more than 7% at the end of August, while those of distributor brands rose by 4.3%, according to Circana. It must be said that the products of Danone, Coca or Nestlé cost on average 35% more expensive than their replicas signed Carrefour or Auchan, according to the panelist.
>> Read also: From food to high-tech, who are the big winners from inflation?
Supermarkets have the final say on shelf pricing
But rather than a general decline that would eat into margins, manufacturers are deploying stratagems to win back consumers.
If the peak has passed, the decline is delayed. In this new school year, food inflation remains at a very high level in France, at 21% over two years according to the Circana institute. In question, in particular, the annual rhythm of negotiations between large retailers and the agri-food industry, which limits tariff adjustments when the prices of raw materials fall. Thus, since June, France has posted a higher food inflation rate than the rest of Europe, according to Eurostat.
This is why Bruno Le Maire summoned all the players in the sector to Bercy this week. The Minister of the Economy wants to expand the list of products in the anti-inflation offers of supermarkets and encourage manufacturers to contain the surge in prices. Especially since the flight of consumers is accelerating. Over one year, the major national brands saw their sales volumes plummet by more than 7% at the end of August, while those of distributor brands rose by 4.3%, according to Circana. It must be said that the products of Danone, Coca or Nestlé cost on average 35% more expensive than their replicas signed Carrefour or Auchan, according to the panelist.
Read alsoFrom food to high-tech, who are the big winners from inflation?
Supermarkets have the final say on shelf pricing
But rather than a general decline that would eat into margins, manufacturers are deploying stratagems to win back consumers. “My little finger tells me that in the coming months, the promotions will multiply,” suggests Jérôme Foucault, president of the Association of processed food companies. Coca-Cola announced this summer to lower the prices of family sizes of its sugar-free drinks by 10%, for three months. “Even if we do not observe a significant drop in our costs, in particular sugar, we want to find the best balance to support our value chain”, advances its French subsidiary. Implied to feed the production tool.
Only then, it is the supermarkets that have the last word on the display of prices on the shelves. It is up to them to pass on the promotion, or not. To show its good will, Danone has printed on the packaging of some of its yoghurts a “maximum recommended price”, of 1.50 euros for eight natural yoghurts. “It’s clever because it brings transparency, notes consultant Olivier Frey. But some supermarkets will choose not to bring this range onto the shelves, because they like to have their hands on the labels.” In particular Leclerc, always looking for the lowest price.
Shrinkflation flagrante
Some manufacturers have also agreed to renegotiate their prices with distributors before the summer, in order to pass on the reductions in certain raw materials. “We were one of the first to initiate a reduction in our prices, welcomes Audrey Luc, spokesperson for Panzani. Our main asset is price accessibility.” The price per kilo of packets of their emblematic pasta, such as that of 500 grams of pasta, has fallen by 6 to 7 cents on the shelves. As a result, sales fell by only 1% in volume over one year, where the major competing brands lost up to 10%.
Read alsoShrinkflation: how manufacturers make you pay more for smaller products
And then there are the tricksters. Findus has quietly dropped the weight of its box of frozen hash browns by 10 grams. Its price per kilo, for its part, has soared by 68%. Intermarché denounced the maneuver in a poster in stores at the end of August, mocking: “It throws a chill.” A staging, sign of a tension which rises between distributors and manufacturers.
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