French Prices Expected to Remain Elevated Until March, According to Supermarket Chain Les Mousquetaires

31 Aug, 2023

French Prices Expected to Remain Elevated Until March, According to Supermarket Chain Les Mousquetaires

Thierry Cotillard, the head of Les Mousquetaires, a prominent supermarket chain with over 3,000 outlets across France, echoed concerns shared by a competing retail entity, suggesting that French consumers' reduced spending is influenced by the persistently high cost of living. In line with this, Cotillard and other retail leaders are scheduled to meet with Finance Minister Bruno Le Maire to strategize on methods to reduce prices.

Prior to this meeting, Cotillard revealed on RTL radio that French shoppers have curtailed their supermarket purchases by approximately 5% in terms of volume. He further noted a decline in the acquisition of perishable goods like fish and meat. He emphasized that an overall improvement in price levels is not anticipated until March.

Cotillard explained that while decreases in raw material prices, such as oil, wheat, and paper, have occurred, some retailers are adjusting consumer prices using their private label brands. Nevertheless, the existing legislation does not mandate national brands to renegotiate their pricing structures, leading to a mixed response from different brands.

The CEO of another French retail giant, Carrefour, issued a similar warning on Tuesday. He highlighted how elevated prices have driven consumers to significantly curtail spending on essential products. He also urged the government to postpone a proposed law that would limit the promotional offers retailers can provide.

Unlike many European nations where inflationary pressures are subsiding, France is experiencing a more sustained inflation rate due to a surge in food-related inflation since March following annual price negotiations between producers and retailers. With a food inflation rate surpassing the general French inflation rate of 5.1% in July, the government is concerned about the potential negative impact on already delicate consumer confidence and aims to steer food inflation onto a decreasing trajectory.