2023-04-28 14:00:01
In 2021, the influence of the Covid-19 epidemic began to decline, but that of inflation set in: strong demand due to the economic recovery, supply reduced by several global confinements, distribution chains to be relaunched … A year later, the war in Ukraine added pressure on the prices of energy and many raw materials. And, at the end of 2022, food manufacturers decided to restore their margins during negotiations with distributors.
As a result, prices have increased by around 15% in one year for foodstuffs, a trend confirmed by provisional figures from the National Institute of Statistics and Economic Studies (Insee) for April.
How does such a level of inflation – unprecedented since the 1980s – manifest itself on a daily basis? What are the implications for consumers?
Decline in food consumption in volume
In normal times, food consumption increases by about 1% per year. In recent months, it has fallen and is now at the level of 2007, after a succession of sharp cuts made by households in their purchases.
Soaring prices have started to cut into the volumes of food goods consumed, especially for the poorest, whose share of expenditure devoted to food is much higher than that of the wealthiest.
The year 2022 has recorded a decrease in food consumption of 4.6%i.e. the largest decline since the start of these statistical series, in 1960. Previously, only one year (2021) had experienced a negative evolution (− 0.8%), when the French had stopped taking all their meals at home returning to the restaurant.
A INSEE survey conducted in December 2022 illustrates recent changes in consumer habits: “To save on food, households mainly choose to consume less (…), for example, by buying meat less often, or in smaller portions, or by no longer buying certain products at all. » Other solutions: change brands or go downmarket.
Report on distributor brands
More and more, consumers are falling back on products at the foot of the shelves. Distributor brands or own brands, which spend very little on , marketing, research and development, can, in fact, offer competitive prices for the “classic” segment, or even discounted prices for the “first price” segment. On average, these products cost 25% to 30% less than so-called “national” brands.
“The volumes of classic private labels increased by 0.2% in the first quarter and those of first prices by 13.3%”, describes the Circana study center (ex-IRI). Conversely, national brands saw their volumes shrink by 4.2%. Result of the races for the producers-distributors, who have filled their “anti-inflation baskets” with “in-house” products, the turnover of this segment is flourishing.
The executive has asked players in the agri-food and mass distribution sectors to return to the negotiating table in June, to take into account a drop in raw materials. If the negotiations take the path of price moderation, private labels could see their appeal to consumers diminish in the second half of the year.
Sacrificed purchases, such as fish
If there is one area of everyday food products, apart from those considered luxurious (foie gras, asparagus, champagne, etc.), where the French restrict themselves, it is fishmongers. After two positive years of Covid-19 for the sector, appetite has subsided in 2022, as consumers have been refreshed by soaring prices, due in particular to the high cost of fuel to go out to sea and that of feed for farmed fish.
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Soaring prices are felt for both fresh fish and frozen fish, the latter having additional costs energy consumption to maintain products at −18°C.
The savings consumers are trying to make on their shopping cart is “particularly noticeable for animal proteins”, summarizes Kantar. The market research company has thus calculated that the fish market purchases fell by 13.7% in volume in the first quarter, when meat fell by 7%.
In fact, despite excellent results driven by food inflation, supermarkets are unable to take advantage of the fish department, whose turnover was even negative in March (− 1.6%), recalls Circana . In some supermarkets, the fishmonger’s stand, formerly open all day, is only open three days at the weekend and only in the morning.
Inflation remains around 6% over one year
The rise in prices remains sustained, around 6% each month (compared to the previous year). It will soon be a year, in June, that inflation has risen to this level, not seen since the 1980s.
“This rise in inflation would be due in particular to the acceleration in energy prices (the fall over one year in the prices of petroleum products being less marked than that of last month)”, explains INSEE in its brief information note. The effect of the discount at the pump, which came into effect in April 2022 and which ended in December, amplifies the gap with current prices.
INSEE also advances the arrival of a new player in the equation, services. Indeed, the rise in prices is now spreading to rents, financial services, insurance, transport services, etc.
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