March wasn’t a bad month, but inflation picked up on the shelves anyway. According to the monthly study by Circana (ex-Iri), the prices of consumer goods rose 1.8% in the third month of the year, the biggest rise since the start of the inflationary wave in 2021. In other words, it is as if a representative shopping cart of the products went from 100 euros in February to 101.80 euros in March.
Therefore, March 2023 sets a new monthly increase record. The previous peaks were October 2022 (+1.5%) and July 2022 (+1.6%). Over the course of a year, inflation now stands at 16.2%, after 14.5% in February and 13.7% in January. Compared to March 2021, the increase is even 17.7%. The same shopping cart that you paid 100 euros for two years now costs you 117 euros. Unheard of since the panelists made pricing statements.
Food (+1.9%) was the department that increased the most in March, particularly salty foods (pasta, rice, tins, sauce, etc.) with an average increase of 3%. They are followed by sweets (biscuits, chocolates, etc.) with 2.7%, dairy products (+2.7%) and water and non-alcoholic beverages (+2.5%).
On the product side, they continue to be frozen meats (+31.6% in one year), tissues (+30.4%), ready meals (+30.3%), toilet paper (+30.3%), +27.4%) and mustards (+27.3%) which are the most inflationary.
Spectacular climbs that show acceleration but we cannot speak of a “Red March”. The rise in prices continued but there was no double-digit explosion, and this while trade negotiations ended this month with average increases estimated at 10% by large retailers.
Booming National Brands
This is not a surprise to panelists who expected a gradual increase in prices during the second quarter. Since the end of the negotiations, the big retailers have been buying their products at the new prices. But the delivery time for orders may take several weeks or even months. Meanwhile, stores continue to color their stock at the old prices.
In addition, commercial negotiations refer exclusively to branded products, which represent approximately 66% of consumer purchases. Entry-level products and private label products (MDDs) are not affected by these annual negotiations and are therefore less likely to suffer from this price increase in March. This is also what we see in the monthly evolution. Prices of all consumer products rose 1.8% in March, but the only national brands posted a 2.2% gain when private labels (+1.2%) and first prices (+0.8 %) rose more modestly.
In some departments, the differences are sometimes substantial. White-label dairy products thus increased by 1.7% in March compared to 3.4% for national-brand products, half the increase. In non-dairy fresh products (delicatessen, catering, poultry, etc.), the increase was three times less for private labels and entry prices (+0.5%) than for brands (+1.6%). The greatest difference occurs in candy with an increase almost five times higher for national brands (+2.9%) than for entry prices (+0.6%). Savory foods followed with inflation of 3.7% for brands compared to just 1% for entry prices and 1.5% for own brands.
Consumers are not wrong. Since the beginning of the year, sales of branded products have fallen 6.4% while those of first prices have jumped more than 10%.
If March wasn’t “red,” the still-seen sharp rise is likely to continue in subsequent months as stores restock their shelves. In April, an even larger proportion of products at the new prices should supply our stores. The average price increase could be around 2%. According to Circana experts, the overall increase could reach 7% in June compared to February rates. Before perhaps a decline more than ever expected by consumers.
Source: BFM TV
