HomeEconomyInflation: price differences between the most expensive and least expensive brands skyrocket

Inflation: price differences between the most expensive and least expensive brands skyrocket

According to panelist Iri, price differences between brands reached record levels in October. Some brands no longer seem capable of cutting their margins to keep prices reasonable.

Prices continue to rise in supermarkets. In October, the rise reached spectacular levels in a year. According to the Iri barometer for LSA, consumer goods inflation rose from 9% in September to more than 11% in October. Two points in one month, something unprecedented since the start of the inflationary upswing in 2022.

If we take only food products, the increase is even more spectacular. After the increase of 9.75% recorded in September by the panelist, food inflation reached 11.45% in October. Some products never stop burning, such as frozen meat up 31.8% in October or paper such as tissues and paper towels up +28%.

These are global increases that affect all prices recorded in supermarkets. But Iri points out in her latest barometer that the gaps widen considerably depending on the group. Stores are not all in the same boat when it comes to inflation.

The gaps will widen

The price difference between the two most expensive brands and the two least expensive (which the panelist refuses to name) reached a record level in October at 25.6 points. In other words, a shopping cart that would cost you 100 euros in the cheapest brand can cost you almost 126 euros in the most expensive one.

If there have always been more expensive brands than others, the gap is around 15-16 points in recent years. However, since a year ago, Iri data shows that we have gone from 18.5 points in October 2021 to almost 26 this month.

According to distribution experts, it would be the Casino brand that could no longer contain the rise in prices. Committed to a debt reduction plan, the group can no longer afford to gamble on its margins to contain price increases as it did earlier in the year with its fuel operations in particular.

A quick search of brand units reveals significant price differences on the same products.

For example, the two Loué chicken fillets are sold for 11 euros in a Casino unit.

When they are still at 7.40 euros for Leclerc. That is a difference of almost 50%.

Heavily affected by inflation, chicken is becoming an important price marker for French customers who are increasingly comparing the price of poultry.

We can multiply the examples in star products such as Harrys crustless sliced ​​bread, 32% more expensive in Casino.

€2.32 for a 500g pack of crustless sliced ​​bread at Casino.

1.75 euros for a 500g package of crustless sliced ​​bread at Leclerc.

Of the twenty products compared, Casino is sometimes less expensive than Leclerc but to a lesser extent and in only two products.

More margins for distributors

And again these are examples taken from the units. In stores, the differences are even greater with brands like Géant and Auchan appearing to lag behind Leclerc, notes distribution specialist Olivier Dauvers.

While manufacturers are more likely to pass on their energy cost increases to the end of the year (until now it was mainly for raw materials), price differences could still widen between brands.

It is the listed brands, worried about their profit margins, that stand to lose. In the United States, the giant Walmart issued a warning about these profits last July. You must multiply the discounts in order to sell your shares. The same goes for Tesco in the UK, which uses its margins to “keep the cost of everyday shopping as affordable as possible,” group CEO Ken Murphy said earlier this month.

After having made the cushion in recent months to limit the rise in food prices, large retailers no longer have much room for manoeuvre.

Author: Frederic Bianchi
Source: BFM TV

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