Why speak of “red march”?
Each year, supermarkets negotiate with their suppliers in the agri-food industry the prices and conditions of sale at which they buy a large part of the products they will then sell, indicates La Voix du Nord.
These are the annual negotiations that take place for all the so-called “national” brand products (Danone, Lu, Mondelez, etc.). Private label products (Brand Repères, Produits U or Carrefour, etc.) are not affected.
Belgian consumers will therefore be impacted by this price increase.
These negotiations, which must be concluded no later than March 1, are traditionally tense, but are all the more so this year in an inflationary context (energy, transport or raw materials) which weighs on the margins of all the players. , reports La Voix du Nord.
Arguing that their production costs have risen, manufacturers have asked supermarkets to buy their products more expensive. But the increases requested are “delusional”, up to 20%, castigated in an interview with Le Figaro on Tuesday evening Alexandre Bompard, CEO of Carrefour, who at the same time published comfortable financial results.
Distribution ensures that it cannot absorb these price increases alone and will have to pass them on to its customers. The NielsenIQ panelist, formulating the hypothesis of a 15% increase in food prices in June 2023 compared to 2021, estimates that this increase would generate, for a household with two children, an additional cost of around 800 euros for same purchases as in 2021. In 2022, this additional cost was 280 euros, writes La Voix du Nord.
Real or exaggerated risk?
Supermarkets have an interest in waving this threat while negotiations are still ongoing. However, they are not the only ones to anticipate increases on the shelves. “There will be increases in March and June which will be due to renegotiations”, estimates Clément Genelot, specialist in the distribution sector at Bryan, Garnier & Co.
Concern over rising prices is heightened by a bill the French Senate is considering from Wednesday. If it is voted and promulgated before the end of February, it would restore this year “bargaining power to star brands” against supermarkets, “which could recreate additional inflation”, observes Clément Genelot.
What possible consequences?
French households are already adapting to the rise in prices, measured by INSEE in the food sector alone and over one year at more than 12% in December. Two phenomena are observed: the descent in range, that is to say the search for equivalent but less expensive products, the first prices for example. And a postponement of purchases to brands deemed less expensive.
But the next step is dreaded by the entire agri-food chain: customers “deconsume”. In other words, they deprive themselves of products that have become too expensive.
A drop in volumes sold, “everyone suffers, the producer from whom we will ask less wheat, the processor who will have fewer orders and we who will have fewer sales”, explained in early February the president of Système U Dominique Schelcher , says La Voix du Nord.