81% of product categories are affected by inflation

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In February, a first alarm had sounded: inflation was beginning to affect consumer products, with a price increase of 0.52% compared to the same month of the previous year. March confirms the trend. Above all, the annual commercial negotiations between major distributors and manufacturers, concluded at the beginning of March, have worsened the situation.

The increase in food prices indeed reached 1.26% last month on a yearly low, according to the latest Nielsen IQ study. And the products concerned are more and more numerous: while in February only 68% of the categories were affected, they are now 81%, underlines the specialized firm. For three products, inflation already exceeds 8%: these are pasta, pulses and frozen meat.

The prices of the main national brands are also growing

Last year’s weather events, such as the frost in April 2021, as well as the volatility of world grain prices, which has been going on for months and aggravated by the war in Ukraine, partly explain these increases.

But according to Nielsen IQ, the main cause of this acceleration in inflation is the implementation of new tariffs on which manufacturers and distributors agreed during commercial negotiations” closed March 1. The proof of this is that between March and February 2022, the prices of the main national brands, on which these negotiations focused, grew by 0.87%, whereas a month ago they were still deflationary, and that on during the same period, inflation for all foodstuffs stood at 0.67%.

The price of national brands is now increasing in a similar way to private labels”, notes Nielsen IQ.

For the first time after several years of deflation, these negotiations have in fact resulted in an average increase in tariffs paid to manufacturers of 3%. A result, however, insufficient for the latter, who demanded increases of up to 8%, necessary in their eyes to compensate for the increase, in 2021 and 2022, of all their production costs: agricultural raw materials, energy, packaging, logistics…

An evolving situation

Because of the worsening inflationary context linked to the war in Ukraine, the government has already asked distributors and manufacturers alike to get back around the table. He even managed to get them to sign a charter, guaranteeing on the one hand the reopening of these negotiations by the distributors even when the legal conditions are not strictly met, on the other hand the transparency of the suppliers on the increases they claim. .

READ ALSO Food prices: the government proposes a framework for the resumption of negotiations between large retailers and manufacturers

The situation is therefore still evolving, especially since only 10% of contracts had been reopened two weeks ago, according to the Ministry of Agriculture and that, according to the law, distributors have one month from the sending the request for renegotiation of their suppliers to react.

The great volatility of the international markets could moreover make these renegotiations quickly null and void, fear many observers. And the new episode of frost which has just hit France could have consequences on the prices of fruit next summer, as well as on canned food in the fall.

“The forecasts change every day”, observes Immanuel walking sticksa pricing and distribution services expert at NielsenIQ France, who nevertheless puts forward the possibility of average inflation for consumer products of 2% in April and 3.5-4% at the end of the year.

Cases of ruptures on the rise

What is certain is that this uncertainty is already pushing some French people to so-called precautionary purchases with a larger storage effect than usual”, that increase sales of certain products and sometimes lead to stockouts, notes Nielsen IQ.

During the last three weeks of March, sales of basic necessities categories rose sharply, in value due to inflation, but also in volumes, despite a gradual slowdown in this trend. This is particularly the case for oils, flour and pasta, for which the number of shortage incidents in mass distribution, excluding discounters, increased respectively by +37%, +26% and +21% between 21 February to March 27, 2022.

IHowever, professionals want to be reassuring about short-term stocks.

“In France, today, there is no shortage for everyday consumption and there will not be until the summer”, declared Sunday on BFMTV the president of the strategic committee E.Leclerc, Michel-Edouard Leclerc, quoted by AFP. “Pasta, there is. For sunflower oil, our stocks go until June,” he said.