2023-10-02 20:14:43
According to INSEE, food prices fell by 0.3% in September 2023 compared to August 2023, the first monthly drop for this index since October 2021. The current year should therefore mark a first favorable turning point for the household basket with food inflation forecast at 7.2% year-on-year in December, compared to 11.2% in August.
“This slowdown is linked to prices which have“act upstream, both in terms of agricultural raw materials and energy”, analyzes Julien Pouget at INSEE. According to his calculations, the increase in the cost of these inputs explained, in 2022, nearly 90% of the increase in prices at the farm gate, 70% of the increase in prices for agri-food products leaving the factory and finally approximately 50% of the dynamics of labels on the shelves. A third of the increase in consumer prices comes from the dynamics of wage costs, and the rest comes, among other things, from the margins of agri-food companies.
Outbreaks on sugar, cocoa, olive oil…
Can we expect reductions in the “food” sections? Everything depends first of all on the weight of raw materials in the composition of the price of a product. “Wheat accounts for 10% of the cost of bread, and up to 35% for noodles, explains economist Philippe Chalmin, former president of the Observatory of price formation and margins, an advisory body created in 2010. The drop is very marked for cereals, wheat and soft wheat, but prices remain stationary for meat and dairy products while sugar, rice, olive oil and even cocoa and oranges see their prices soar. »
You then have to take into account transmission times. According to INSEE, the increase in prices of agricultural raw materials is reflected in the consumer price index by around 50% after three quarters, then 80% after one year.
“But the transmission is both less rapid and less significant when it comes to price reductions,” underlines Philippe Chalmin, who recalls that if energy prices have fallen“they still remain twice as high as before the war in Ukraine”.
The specter of deconsumption
In addition, the high volatility of world prices may work against falling prices. “Buyers in the markets protect themselves with expensive insurance contracts, deciphers Christopher Dembik, investment strategy advisor at Pictet AM. And the greater the uncertainty, the more economic players will want to keep prices high to protect their backs, at each link in the chain. »
However, certain elements may prove favorable to the food purchasing power of the French. The most important of these is probably deconsumption, “a worrying phenomenon for both manufacturers and distributors”, underlines consultant Frank Rosenthal. In July 2023, food consumption fell by 7.9% in volumes sold, according to INSEE (read the benchmarks).
For Philippe Goetzmann, “Major distribution has an objective interest in boosting consumption and therefore playing on prices. But it will instead use promotions on a case-by-case basis, negotiated with manufacturers.”
Ineffective blocking
This expert notes another signal of – slight – relaxation: “The next trade negotiations should open with, on trend, requests for increases of around 10% from manufacturers compared to double last year. »
The law in preparation, intended to advance negotiations on certain products, and with the largest manufacturers, should however not change anything, “if not adding a legislative layer to an already overregulated commercial system in France”, analyzes Gaëlle Le Floch, at Kantar Worldpanel France. She also doubts the price blocking announced in August by Bercy on 5,000 references… the list of which we still do not know. “And how can we check this measurement in all supermarkets? “, she asks herself.
Inflation durable
Result, while between January 2021 and August 2023, the prices of food products increased by 21%, unprecedented, no expert expects a drop in prices. “We will never go back” insists Philippe Goetzmann.
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“We are entering into an inflationary system for the long term. The supply chain problems and the soaring cost of raw materials encountered after Covid will recur, analysis Gaëlle Le Floch. The abundant and cheap food to which we have become accustomed in the West is over. Especially since the level and quality of harvests are made uncertain every year around the world due to climate change. »
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The French are adapting their consumption
According to INSEE, the consumption of French households is certainly increasing in value, that is to say in euros spent (12% more than in 2019), but it decreases in volume (quantities purchased), in general and even more strongly with regard to food products (9% below its level of 2019).
In June 2023, 47% of households surveyed by INSEE declared having changed their purchasing habits – compared to 37% in December 2022 – in the direction of less consumption (14%), diversification of their stores (12%) and purchasing cheaper products (17%).
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