Do what I say, not what I do. Will supermarkets play a double game when it comes to lowering prices? While the bosses of the big brands have spent months clamoring for manufacturers to renegotiate their prices downward, they themselves do not seem to be in a hurry to cut the prices of their private labels (MDD).
If indeed the one-year inflation of these products has slowed down according to Circana with an increase of 16.7% in June after a record of 19.6% in March, certain indicators seem to indicate that since then the distributors have put the kibosh.
In our BFM basket, which has increased in price this week, almost all of the private label products are increasing. Surely one or two cents as in baguette, apples, chips in a bag but sometimes a little more as in pasta with a 1 kg package of torti whose price ranges from 1.59 to 1.67 euros.
The same observation on the indicator side of 100 private label food products from Olivier Dauvers and A3 Distrib. The retail expert pointed to an increase of 0.4% in his basket between mid-June and mid-July, after an increase of 0.5% compared to the previous month. With inflation in most brands (nine of the 14 studied): +1.2% in Leclerc, +0.8% in Intermarché, +0.4% in Auchan…
Non-strategic summer for prices
It is true that these are very slight increases, but they seem to contradict the rhetoric given by brands about reductions in the price of raw materials, which should lead to reductions on the shelves.
The second scenario seems the most likely. Especially since brands like Intermarché, which have their own production units, are not more “proactive” in the decline.
So why wait instead of immediately relieving consumers’ wallets?
According to the expert, the answer has one word: summer. The season is not at all strategic for distributors who prefer to wait for the start of the school year to start the price war again.
So there is no reason to be too eager to cut prices. It could well restore the margin a bit after months in which it was tested to limit inflation and before a return to school that promises to be hard fought. The defense of the purchasing power of the French will wait a little longer…
Also, at this point, dealers have played fair since the spring of “green September” by suggesting that prices wouldn’t really come down before the start of the school year.
Lidl alone, through the voice of its chief executive Michel Biero, had promised price cuts on 300 private label products this summer. A brand that is not covered by the Olivier Dauvers Private Label Price Indicator, which measures the prices charged on records.
Source: BFM TV
