As France’s finance minister meets with industry executives for two days of talks on grocery prices, another supermarket chain has issued a warning on the cost of food.
Thierry Cotillard, the boss of Les Mousquetaires, told the RTL radio service today (30 August) that grocery prices in France are unlikely to fall by a great degree until March.
Finance Minister Bruno Le Maire is holding meetings with retailers today to discuss how to bring down prices and is due to have talks with food producers tomorrow.
On Tuesday, Le Maire told reporters at an annual conference held by Medef – or the Mouvement des Entreprises de France federation – that he wants retailers and suppliers to further lower the price of consumer goods and to provide, according to Bloomberg, ‘long-term visibility on prices’.
Cotillard, who was due to attend today’s talks, told RTL before the meeting that French consumers had reduced their shopping basket volumes by 5% and were buying less fresh produce such as meat and fish.
He added that he expects “no improvement” in the overall level of food prices before March: “It’s a real concern as the French are consuming less … It’s not good for the economy, it’s not good for business,” Cotillard said.
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Cotillard said grocers are passing on savings as prices of raw materials, oil and wheat retreat, via their own private-label lines rather than in branded products.
“The law does not force national brands to renegotiate their prices. Some are playing ball but others don’t.”
Cotillard’s comments follow those on Tuesday from Alexandre Bompard, the CEO of French retailer Carrefour, who said consumers were cutting back on essential goods because of the impact of inflation on their spending power.
Le Maire said on Monday he would ask food producers to take more action to tackle inflation, suggesting efforts so far were insufficient, according to Reuters. That was despite an agreement with food producers, effective from July, to cut the prices on basic food items such as pasta and chicken.
Inflation, as measured by the consumer price index, eased to 4.3% in July on an annualised basis, from 4.5% in June, figures from the Insee statistics office showed.
The slowdown was led by a 3.7% decrease in energy prices but was offset by food inflation of 12.7%, albeit slowing from 13.7% in June.
In June, food companies operating in France agreed to re-negotiate prices with retailers after Le Maire threatened to either use tax measures to recover what he considered to be excessive profits or name and shame companies if they did not accept talks with grocers.
That followed an agreement reached in March that intended to relax inflationary pressures on consumers by reducing retailers’ margins.