INSEE published this morning its full monthly inflation assessment for the month of November. The rise in prices stabilized at 6.2%. But the French feel that these official figures do not correspond to reality. Or at least what they perceive while shopping. But there is nothing abnormal there.
In their monthly assessment, INSEE statisticians take into account price developments for all products and services that households are likely to purchase. What the French put in their food basket (excluding alcoholic beverages) weighs only 15% in the price index. A level that corresponds to the average budget that the French dedicate to the purchase of food.
+60.9% in the oil department, +26.2% in flour
But, at the same time, it is when they fill their basket or when they go to the supermarket checkout that consumers perceive inflation the most. For two reasons. First of all, it is easier to memorize the prices of the products that we buy often. Then, in recent months, it is precisely the prices of food products that have increased the most. INSEE estimates that, excluding alcoholic beverages, the average increase reached 13% in November.
Above all, in the very comprehensive survey published on Thursday, we see that most basic food products have seen their prices increase in a year by more than 20%. Unsurprisingly, this is the case in the olive oil department, where on average the price per liter of bottles (excluding olive oil) has increased by 60.9% in one year. Homemade cake lovers not only pay 26.2% more for their flour than a year ago, but also have to take out more money for sugar (+20%), margarine (+27.5%) or butter ( +19.8%).
Sharp drop in sales of seafood, chocolate and whiskey
And faced with these sky-high prices for basic food products, what do the French do? They continue to buy them because they are more affordable than processed products, but they are more selective and more often add premium brands to their basket. On the other hand, they reduce their purchases of everything that seems non-essential.
According to Iri’s latest monthly note, retail sales in the parapharmacy department have fallen by more than 25% in the last twelve months. Some are even reducing their budget for “small pleasures”: sales of chocolate bars in November were 8.8% below the level of November 2021 and for the liquor most appreciated by the French, whiskey, Iri notes a drop in twelve months of 8.3%.
Bad omen for Christmas? We can fear it. In any case, some consumers say they will also cut the traditional additional expenses that are allowed for vacations. According to the Ipsos Institute, more than a third say they will reduce their decoration costs. And one in four plans to reduce their budget for meals and gifts.
Source: BFM TV
