why prices are falling slightly according to Thierry Cotillard

why prices are falling slightly according to Thierry Cotillard
why prices are falling slightly according to Thierry Cotillard

For the first time since November 2021, the prices of consumer products are down slightly (-0.1% over one year) according to the latest Circana/LSA barometer. On RMC, this Friday, the boss of Intermarché Thierry Cotillard gives several explanations.

Will receipts finally become lighter? According to the Circana/LSA barometer published this Thursday, the prices of consumer products are down very slightly (-0.1% over one year, -0.2% over one month). This is the first time since November 2021 that the one-year trend has reversed. While some food items are still climbing (canned flageolets +8.7%, oils +8.1%, canned sweet corn +7.4%, fruit juices +5.6%, salad vegetables + 5.1%), it is especially hygiene and beauty which is decreasing (care for men -8.7%, shower gels -5.5%, intimate hygiene -4.6%).

Thierry Cotillard, the boss of Intermarché and Netto, confirms this drop. “We see it on very important products, like laundry detergents,” he explains in Apolline Morning on RMC and RMC Story. And even more on private labels. Our laundry today is 15% off compared to a year ago. Frozen fries are -17%. When you go to the checkout, you feel it. And it’s not just private labels. We also made the choice, and this is the reality because we are in competition, to lower the margins on national brands. This is why today we are starting to see deflation, on certain departments and certain products.”

“The basket decreases, the frequency increases”

After two and a half years of inflation, how can we explain this beginning of a turnaround? According to the president of the Les Mousquetaires group, there are two main reasons: the drop in purchases by consumers and competition between major retail players. “With the Descrozaille law, mega-promotions are over. Volumes dropping significantly, -7% on hygiene-beauty aisles, and with a study saying that one in two French people no longer consume what they consumed before “because the prices were too high, we decided to reduce these products and go into deflation”, indicates Thierry Cotillard.

“It’s a choice of brand, also adds the boss of Intermarché and Netto. Today, the market is declining in volume, -0.5%. But we are doing +5%. Why? Because that since the start of the year, we have 1,000 private label products in deflation. We have national brands that are going to fall. The brands that are setting prices today are picking up a lot of new customers. and Netto It’s proof that competition between us brings customers.”

Customers who have changed their habits. “Spending in the consumer’s shopping cart is falling. They are getting into the habit of coming more often, to waste less, to control spending. The basket is decreasing, the frequency is increasing. It’s a strong trend that “we have observed and which continues”, notes Thierry Cotillard.

Further decline in 2025?

Can we now hope that deflation will continue? “We should not expect a significant change until the next negotiations, warns the president of the Mousquetaires. We buy the products at the end of January and we will have this price for a year. The competition between brands will do that we will perhaps drop on certain products But we will have to meet in January 2025 to see if the manufacturers’ prices are falling. And if they are falling, the distributor is doing its job. and passed on to consumers, at that point we could have a greater reduction.”

And Thierry Cotillard swears, supermarkets could not until now offer lower prices. “What we took was a tsunami of inflation,” he assures us. “We did not have the possibility because in the Intermarché and the Netto, we also had electricity bills which doubled. When the price came from the manufacturer, it had taken +10% and you had a result of +2%, you could not reduce the products by 5%. Otherwise, we were in deficit.

Laurent Picat Journalist RMC Sport

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