2023-04-28 12:30:00
PURCHASING POWER – Inflation is experiencing unprecedented peaks which are not sparing food. According an INSEE report, the Consumer Price Index (CPI) rose in March 2023 by 0.9% over one month and 5.7% over one year. In April, in an estimate just released on Friday, the CPI rose 0.6% over one month and 5.9% over one year. Food prices have recorded a dizzying increase in one year, which remains around 15%. This highly painful situation for French households will continue “until the end of summer”, according to Emmanuel Macron and well beyond according to observers. In the meantime, the French are doing as best they can to maintain dignified access to food, despite rising prices.
According to the latest INSEE report (the National Institute of Statistics and Economic Studies) published on April 14, the consumer price index (CPI) increased in March by 0.9% over one month against an increase of 1% in February (i.e. 5.7% over one year). As for food prices, for the same period, an increase of 1.8% was observed in one month against 1.7% in February. Year on year, food prices rose at a breakneck pace of 14.8% in February and 15.9% in March.
Regarding the month of April, in an estimate published on April 28 (which will be consolidated in the next INSEE report scheduled for May 12), the CPI rose by 0.6% (or 5.9% over one year). If this time it is energy and services that weigh first in this umpteenth price peak, food prices are still rising by 14.9% over one year and remain a major concern for the French.
Indeed, the latter have been for several months at the foot of the “super mur d’inflation” against which Michel-Édouard Leclerc, boss of the eponymous retail brand, already warned in November 2022. Then guest of the morning of Cnews, he had listed the war in Ukraine and the post-Covid economic recovery among the causes of this price spike.
Industrialists singled out
The Senate, in a July 2022 report, also explained this inflation by the rise in the prices of raw materials, in particular agricultural and industrial, in addition to “bad weather conditions” and “price of packaging”. Added to this are energy prices, particularly those of gas and electricity, driven up by the war in Ukraine.
Yet commodity prices are falling. Wheat costs 40% less, coffee beans 16% less and up to 55% less for oil. For its part, INSEE points out that energy prices fell by 1.4% in March 2023. Food prices on the shelves did not, however, follow this downward trend over the same period. . But regarding the month of April, a very slight lull seems to appear.
Distributors openly accuse manufacturers, who must let go of their margins. For example, biscuits remain on a 25% rise despite a drop in wheat prices. Michel Biero, Lidl’s Executive Purchasing Director, explains to BFM Business that “the big brands, especially the multinationals, must necessarily sit around a table to pass on the reductions to us” raw material.
An identical finding, almost 6 months later, to that of Mr. Leclerc, who called for mobilization. “If we don’t mobilize where the margins are and where the competition is not, it will be very expensive for the French with a super wall of inflation in 2023”, he said.
Negotiations closed at the beginning of March 2023 turned in favor of manufacturers, who demanded an average price increase of around 10%. The renegotiations for the second half of the current year have begun, Leclerc again announced on Wednesday April 26, 2023 to BFM Business, promising to “break inflation”.
“It will be hard until the end of the summer”, warns Macron
While waiting for the results of these talks, the French will have to resist until the end of the summer. At least, according to Emmanuel Macron. “I’m going to be honest, the food prices, it’s going to be tough until the end of the summer”, said the Head of State in an interview granted on Sunday April 23, 2023 to Parisian.
If the government called At the beginning of April manufacturers and distributors to get back around the negotiating table to lower prices “whenever it is objectively justified”, Macron advocates a “work that pays better” and one “dialogue social”. “The Smic continues to increase, the other salaries must follow, and this is one of the subjects that we have put up for negotiation”, he said to the same daily. As of May 1, 2023, the gross minimum wage will increase of 38 euros, going from 1,709 euros to 1,747 euros per month.
However, according to the CEO of System U, Dominique Schelcher, this is especially likely to harden until the end of June. “The prognosis is between 23 and 25% on food and drugstores, perfumery and hygiene by the end of June”, does he have revealed.
An observation shared by Yves Puget, publication director of LSA, a French professional weekly specializing in the food industry and mass distribution. “Inflation has been rising a little every month for just over a year, from 0.5 to 1%, and it will continue at least until the summer. I find it hard to believe that prices The question is: at the end of the summer, will they at least stabilize? he wonders.
How are the French doing?
While waiting for the deadline put forward by Macron or the end of renegotiations between manufacturers and distributors to find out how far this inflationary spiral can go, the French are showing resourcefulness, even sacrifice to fill their baskets. The budget previously dedicated to leisure, holidays or restaurant outings is now used to offset the rise in prices on the shelves.
Rémy Oudghiri, sociologist, deputy general manager of Sociovision, a company specializing in market studies and member of the IFOP group, explains to RadioFrance what “66% of people tell us that their budget barely allows them to cover basic expenses (…) 66% this concerns the most modest backgrounds, but also a large part of the middle class.”
Others fall back on lower quality products and behaviors are varied. Some buy less or stop choosing labeled products (organic or other) while others, in more critical situations, take the risk of consuming products whose deadline has been exceeded.
In the markets, many media report on the practice of food gleaning by citizens who wait until the end of the market at the very end of the morning to collect unsold products or take advantage of interesting offers. The final step before resorting to associations or food banks?
According to a study published in February 2023, more than a third of people who go to food aid structures are new beneficiaries who have been doing so for less than 6 months. Data collected by the CSA Institute for Food Banks reveals that the number of people who received food aid was 2.4 million until the end of 2022, i.e. three times more than in 2012.
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