Carrefour, one of the world’s largest supermarket chains, has taken a strong stance against what it considers unacceptable price hikes by PepsiCo across Europe. In an unprecedented move, Carrefour has decided to stop selling several PepsiCo products in France, Italy, Spain, and Belgium.
The decision comes amid a global period of rising prices and serves as a rare public standoff between a major grocer and a food giant. The affected products include popular items like Lay’s, Doritos, Cheetos chips, Benenuts snacks, Alvalle gazpacho, Lipton teas, Pepsi, 7 Up soft drinks, and Quaker foods.
Carrefour plans to add notes to its store shelves to explain the changes to its customers. The supermarket chain has engaged in discussions with PepsiCo for an extended period and aims to ensure that consumers have access to fair pricing. The notes will provide clarity on the decision and the affected range of products.
In response to Carrefour’s move, a PepsiCo spokesperson stated that discussions with Carrefour have been ongoing for many months, and they will continue to engage in good faith to ensure that their products remain available.
PepsiCo’s finance chief, Hugh Johnston, had previously indicated that the company expected a slowdown in product price increases in 2024, aligning more closely with the overall rate of inflation. The company has experienced significant price hikes on its soft drinks, snacks, and packaged foods for the past two years. PepsiCo is set to report its latest quarterly results next month, with projected earnings growth of 13% and revenue growth of 10% for 2023, excluding currency impacts.
Carrefour’s decision not only reflects concerns about rising prices but also emphasizes the company’s commitment to ensuring fair pricing for consumers. It highlights the complex dynamics between retailers and food manufacturers as they navigate economic uncertainties and meet consumer demands for fair pricing.
This move by Carrefour follows the retailer’s recent practice of attaching labels to products it believes are subject to shrinkflation, where the quantity of a product decreases while the retail price remains unchanged.
Carrefour’s decision to drop PepsiCo products demonstrates the challenges faced by retailers and food manufacturers in addressing economic uncertainties and meeting consumer demands for fair pricing. It serves as a reminder that both parties must find a balance to ensure the availability and affordability of products.
In a broader context, other supermarket operators in the United States have also expressed concerns about escalating prices in certain product categories, despite a general slowdown in the overall rate of inflation.
Europe, which represents around 14% of PepsiCo’s global revenue, has experienced heightened food-price inflation, particularly in countries like France.
Carrefour’s move to oust PepsiCo products calls for fair pricing for consumers and marks a significant development in the relationship between retailers and food manufacturers. As the global market continues to face economic uncertainties and rising prices, finding a balance between profitability and affordability remains a key challenge.
