Carrefour Stops Selling PepsiCo Products in Europe Due to Price Increases
Carrefour, one of France’s largest supermarket chains, has removed PepsiCo products from its shelves in reaction to rising prices, intensifying the ongoing dispute between retailers and suppliers over costs. The decision affects Carrefour stores in France, Italy, Spain, and Belgium, with notices displayed informing customers of the unacceptably high price increases. This escalation comes as Carrefour attempts to exert pressure on major consumer goods companies to reduce prices, which have been raised over the past two years due to increasing energy, commodity, and labor expenses.
Carrefour’s move follows a campaign dubbed shrinkflation, in which the supermarket chain placed warnings on products indicating that they had decreased in size while maintaining higher prices. This campaign, which started in September, aimed to draw attention to the rising costs despite a decline in raw material expenses.
The CEO of Carrefour, Alexandre Bompard, has been vocal about the lack of cooperation from consumer goods companies in efforts to lower prices. In response, PepsiCo CEO Ramon L. Laguarta has stated during an earnings call that the company anticipates higher inflation and expects prices to remain elevated this year.
France, in particular, has experienced a rise in inflation, with preliminary data revealing a December inflation rate of 4.1% compared to 3.9% in November. While food inflation fell from 7.7% to 7.1%, consumer goods giants such as Nestlé, Unilever, Coca-Cola, and Procter & Gamble have all passed on cost increases to consumers, resulting in strained negotiations with retailers and occasional disputes leading to temporary product removal.
The issue of steep price hikes has also led to a shift in consumer behavior, with shoppers increasingly favoring retailers’ own brands, also known as private-label products. Carrefour’s Bompard previously announced plans to significantly increase the share of private labels in their sales over the next three years to reach 40%.
The decision to remove PepsiCo products from Carrefour’s stores reflects the growing tension between retailers and suppliers over prices. As negotiations continue, it remains to be seen whether the two sides can find common ground and reach a resolution that satisfies both parties and ensures affordable options for consumers.
In conclusion, Carrefour’s decision to stop selling PepsiCo products due to price increases highlights the ongoing struggle between retailers and suppliers over rising costs. As consumer goods giants pass on increased expenses to consumers, negotiations become strained, leading to occasional disputes and product removal from shelves. The future resolution of these issues remains uncertain, and it remains to be seen how retailers and suppliers can strike a balance that keeps prices reasonable without compromising profitability.
Note: The information in this article is based on sources including CNN and BFM-TV.
