Why Michel-Edouard Leclerc wants to block the prices of certain products – BFM Business

In 2021, the prices of certain products have soared in supermarkets but according to the IRI, the average cost of the shopping cart has remained stable. For 2022, the spokesperson for the bosses of the E.Leclerc centers fears the worst. It therefore puts pressure on manufacturers.

This Friday morning, on BFMTV, Michel-Edouard Leclerc announced that he wanted to block the prices of a certain number of products sold in his supermarkets to limit inflation. A message addressed to manufacturers from whom they obtain national brand products with strong notoriety (Nutella, Coca Cola, Ricard, etc.).

Because for the moment, on the shelves of supermarkets, inflation remains contained. The company IRI, which scrutinizes receipts in all major retail chains and compares prices per kilo or liter, estimates that over the whole of 2021, the prices of products purchased by customers of hyper and supermarkets have, on average, increased by just under 0.1% over one year.

“First price” brands up 1.6% over one year

IRI experts note, however, that this average hides a clear gap between a trend towards stability for national brand products and real inflation for those of “first price” brands (+1.58% over twelve months).

And again this is an average. In the household products department, falling prices are not uncommon. This is the case for detergent or dishwasher tablets. Conversely, pasta saw its price rise sharply in the wake of soaring wheat prices. And it is the distributors’ own brands that have increased their prices the most.

The retail specialist, Olivier Dauvers, sums up the situation very well on his blog with this illustration showing the evolution of the price of a 1 kilo packet of pasta shells.

Between the end of July and today, the increase reached 69% for the Leclerc and Intermarché brands against only 7% for Barilla shells, this manufacturer having visibly cut its margins. The way a French person perceives the level of inflation therefore depends on his consumption habits.

If he buys ten kilos of Turini shells (Leclerc’s house brand), he now makes him spend 10 euros more than last summer. While for the Barilla pasta regular the increase is limited to 10 cents per packet. However, fans of the famous Italian brand tend to belong to well-to-do households who, moreover, are reputed to eat pasta less often than the average. While modest consumers prefer the cheapest brands on the shelf.

Putting pressure on manufacturers

Hence Michel-Edouard Leclerc’s warning to manufacturers. If the president of the Strategic Committee of the E.Leclerc centers speaks of blocking the prices of symbolic products, it is because he anticipates an inflation higher than 5% on his shelves but also because his group has already had to revise upwards the prices of certain products sold under its own brands.

E. Leclerc is therefore putting pressure on manufacturers who are doing everything they can right now to obtain price increases and restore their margins. The real arm wrestling is there. Remain the champion of low prices and assert itself as the herald of the fight against inflation.