Carrefour pressures suppliers with price tags

Carrefour, the French supermarket chain, has affixed price warnings on certain products, pressuring major suppliers such as Nestle, PepsiCo, and Unilever to combat inflation. This move comes ahead of crucial contract negotiations set to commence soon and conclude by October 15th.

These warning stickers are applied to products that have decreased in size but increased in price, despite the decline in raw material costs. With this action, Carrefour aims to rally consumer support as they gear up for negotiations with some of the globe's most recognized brands.

Reassess pricing strategies

Stefen Bompais, Director of Customer Communications at Carrefour, expressed that the objective of these stickers is to encourage manufacturers to reassess their pricing strategies. Alexandre Bompard, Carrefour's CEO, has consistently remarked that these corporations aren't collaborating in attempts to reduce the prices of essential items, despite falling raw material costs.

In its French stores, Carrefour has labeled 26 products with a note stating: "This product has seen a reduction in volume or weight and an increase in price by the supplier." Examples include a bottle of Lipton Ice Tea, which decreased from 1.5 liters to 1.25 liters, and Guigoz infant formula by Nestle, which went from 900 grams to 830 grams.

Shrinkflation

Consumer groups suggest that "shrinkflation" (products shrinking in size without a corresponding price reduction) is a widespread trend, and supermarkets like Carrefour are also culprits with their private label items. These price warnings will remain in all Carrefour stores across France until the associated suppliers concede to price reductions.

Bruno Le Maire, the French Finance Minister, indicated that price negotiations will occur in September, with expected price reductions coming into effect from January onwards.

Reuters.com