The descent is slow, but this time it is already underway. The pace of price increases in supermarkets slowed in August for the fourth consecutive month. In one year, the Circana institute measured the average increase in product prices at 12.4%, compared to 13.6% in July and another 15.1% in June.
Compared to the maximum of 16.2% reached in March and April, inflation has fallen 3.8 points. For one month, price increases again touched 0% for the third consecutive month. As a reminder, the monthly rate of increase was 1.8% in March following the annual trade negotiations. In August, prices fell even in the hypermarket circuit with a variation of -0.2% measured by Circana.
All product ranges saw their level of inflation decrease in August, but it was the private labels (private label) and the entry prices that, after having increased the most, returned to levels of increase close to those of the national brands.
Big brands are collapsing
In August, in one year, the increase was 12% for branded products, compared to 13.2% in the previous month. At the same time, private labels fell from 14.7% to 13.2% and premium prices from 13.4% to 11.9%. This development further encourages consumers to arbitrage against brands when they shop. Own-brand products, which are already cheaper, are no longer increasing more than the big brands, as has happened in recent months.
Already in July, the gap between purchases of private label products and national brands reached a record level. While private label purchase volumes increased by 4.2%, those of big brand products fell by 7.3%, that is, an unprecedented difference of 11.5 points between these two product categories.
For the large consumer manufacturers, it is urgent to lower prices more drastically, otherwise they will continue to lose significant market share on the shelves to private brands. At the moment, the few decreases observed are mainly due to temporary promotions and not to real and lasting repricing.
Until these products fall sharply, consumers will not feel the disinflation. Especially since two years ago, the increase in prices continues to be very high, 21.3% in August.
Not to mention “green September”, Circana experts believe that the falls will be more significant next month, with a two-year disinflation likely. This would be the first time since the start of the inflationary increase.
Source: BFM TV
