Leading Brazilian retailer Pao de Acucar has threatened to stop dealing with suppliers seeking what it terms ‘unreasonable’ price increases.
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The country is struggling with a 40% currency depreciation which has sent raw material costs soaring, reported the Financial Times. The chain intimated it was considering some pretty aggressive tactics to make consumers aware of the problems it was having, for example by labelling empty shelves: “Say no to this product. It is not available because we did not accept the supplier’s price increase. Please choose a similar product.”
With disposable consumer income stagnant, retailers are unable to pass on much of the burden of price rises to shoppers.
Pao de Acucar’s parent company CBD recently reported a drop in profits for the third quarter.
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By GlobalData
