2023-06-15 17:29:13
The “decline in inflation” which is materializing should not result in a drop in prices, but only in a marked slowdown in the rise, according to INSEE.
Chicken, fish, fruit, chocolate, sodas… Will the surge in labels on supermarket shelves finally subside in the coming months? This is, in any case, the opinion of INSEE. In their latest forecasts, published on Thursday, national statisticians note a “decline in inflationwhich should continue by the end of the year. A “inflexionwelcome, expected by households… But which should not result in a decline in prices for the moment.
If energy was the first culprit behind the explosion in prices last year, it has since been replaced by food, reminds INSEE. “Food inflation has reached unprecedented levels. It forms the most important contribution to headline inflation“, notes the head of the cyclical synthesis division at the institute, Olivier Simon. This observation can be explained above all by the increase in agricultural prices, which have jumped “by 23% in 2022 compared to 2021“. At the same time, the rise in energy prices and that of wages in the sector have contributed to the rise in prices.
The “significant increase in unit margins» in the food industry also participated in this dynamic last year, note the national statisticians. “Since the second quarter of 2022, the observed price has exceeded the equilibrium price, being at much higher levels, which would suggest a marked reconstitution of the branch’s margins“says the note. An observation that will give food for thought to distributors, who have been denouncing the margins of the food giants for a few months. The increase in margins, however, comes at a time when the players had, on the contrary, tended to compress their margins, in 2021, to cash in on the increases in their costs. In addition, manufacturers could standardize “partially“their margins”from the third quarter of 2023“, notes the Insee.
“Downside pressures” in the coming months
Still, the peak of food inflation could be behind us. Of the “downward pressuresare now exerted, while energy prices have fallen back, driving, in turn, product production prices. “In April 2023, the agricultural producer price index
is 7% below its April 2022 level […]reflecting the
recent movements in the world prices of agricultural raw materials”, cites the study as an example. This movement should be accelerated by the opening of negotiations between manufacturers and distributors, under the watchful eye of the State.
Over the last six months of the year, therefore, the situation is mixed. “Consumer food prices could slow significantly, but not necessarily fall on average“Summarizes INSEE. Over twelve months, at the end of 2023, inflation should range between 7% and 8%, a level that is still high, but twice as low as today. “Surrounded by uncertainties“, This forecast is however conditioned on several factors, including the price of oil, those of agricultural raw materials or the results of negotiations within the sector, nuance Olivier Simon.
While we should not expect a massive drop in prices on the shelves, the momentum observed for more than a year should therefore ease. “There is absolutely no downside“, insists Denis Ferrand. The general manager of Rexecode emphasizes “the tailing effect» at stake: the prices on the shelves evolve with a time lag in relation to market prices and upheavals upstream. THE “upward shock» of 2022 was therefore reflected with a delay, in 2023, in prices, and the backlash will again take time to be felt. However, there will be no decline, only a slowdown, all the factors in the producer price – wages, energy, in particular – having been pulled up.
L’inflation a «changed in nature“, also notes the boss of Rexecode: centered on energy at first, it then spread throughout the economy, including food and manufactured products. It now affects more and more services, and is expected, on this item, at 4.2% at the end of December, a continuous increase compared to 3% in May. An acceleration due torising labor costs“, explains Olivier Simon. However, services constitute50% of the household consumption basket. This is the position that we never talk about, even though it is the most important and will experience a strong drift“, worries Denis Ferrand. The rise in prices has therefore not finished straining the household budget.
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