Retail prices in France will not fall significantly before March, the boss of supermarkets group Les Mousquetaires said on Wednesday, echoing a warning by a rival group that French consumers were spending less due to the high cost of living.
Thierry Cotillard, whose group has more than 3,000 stores in France, is among retail executives due to meet Finance Minister Bruno Le Maire on Wednesday to discuss how to lower prices.
Ahead of the meeting, Cotillard told RTL radio that French consumers had cut their shopping at supermarkets by around 5% in terms of volume, and were buying fewer fresh products like fish and meat, adding he saw "no improvement" in the overall level of prices before March.
"We are seeing more falls in the prices of raw materials than rises, we had oil and wheat and now paper. Retailers are passing on those falls to consumers with their own private label brands, but the law does not force national brands to renegotiate their prices. Some are playing ball but others don't."
On Tuesday, the CEO of French retailer Carrefour warned that high prices have forced consumers to make massive cuts to spending on essential goods, and urged the government to delay a law putting a cap on promotions retailers can offer.
As Europe's inflation shock eases, France is seeing less of a retreat in prices than many countries due to a surge in food inflation since March after annual price negotiations between retailers and producers.
The government is eager to get food inflation - more than twice the overall French inflation rate of 5.1% in July - on a downward path, wary that such high levels could undermine fragile consumer confidence.
French retailers and big industrial groups hold price negotiations on an annual basis in March, and this year agreed on a 10% increase on the price of products in supermarket shelves. Cotillard said those negotiations should be held more frequently to reflect changes in the economic situation and the price of raw materials.
Like the boss of Carrefour, he also criticised a law passed earlier this year which puts a cap on promotions retailers can offer.
The law, which is currently due to take effect in March 2024, extends a limit of 34% on promotions that retailers can apply to food items to beauty, hygiene and care products.
