They finally arrive! Waited by the government for weeks, expected by consumers for months, the price cuts are finally being felt on the shelves.
In June, the Circana institute measured a first break in the bullish cycle of 16 consecutive months. The prices of consumer products fell slightly by 0.1% in one month and this affects 35% of the products sold in stores, mainly beverages (-0.2% in June) and cleaning and hygiene products (- 0.4%).
Slight decrease that the institute mainly explains by the positive effects of the anti-inflationary quarter implemented in most of the brands. And that must be tempered with the rise in prices for one year, which remains at 15% (16% the previous month) and 20.7% for two years.
But we can reasonably expect the decline to accelerate in the coming months.
-73 cents in Danone yogurts
In the first place, because as of July 1, around twenty major brands have agreed to lower their prices. The discounts will be between 2 and 20% for an average of 10% and must affect 200 to 300 references.
We can cite some French brands that have decided to play the game, such as Danone, which, for example, will operate discounts on its bestsellers such as Danette or yoghurts.
Le Parisien cites the Danone Nature 16 pack as an example, which will drop from 3.23 euros to 2.50 euros in July, a significant drop of 73 cents. Another brand, Panzani, will also carry a small part of the fall in wheat prices observed for several months. The 500 gram package of pasta shells, which has cost 30 cents in 2 years, should fall below 1 euro compared to the current average of 1.05 euros.
It is certainly symbolic but it puts an end to months of painful outburst.
Have brands finally caved in to pressure from both consumers and the government? Above all, it was probably the business case that convinced them to make an effort. Since the beginning of the year, the volume of sales of branded products has recorded a historic drop of 7.3%. The fire had to be extinguished by restoring the attractiveness of product prices.
We now have to hope that these reductions are long lasting for consumers to really feel them. However, these are mainly promotions and discounts that will take place in July and not new rates as such.
The reluctance of brands
A strategy that reflects certain reluctance. Like employers who are quicker to pay bonuses to their employees rather than raise salaries, brands are opting for promotions, which are temporary in nature, rather than renegotiating downwards that would compromise them over time.
To date, almost no major brand has renegotiated their prices according to dealers. Michel-Edouard Leclerc also asks the Government this Wednesday to change the law to force them to do so.
Source: BFM TV
