Michel-Édouard Leclerc, the head of the E.Leclerc group, has announced aggressive pricing strategies as negotiations with suppliers begin after a year of sluggish consumption. Speaking on LCI on Sunday, December 22, he emphasized, "If the inflation rate remains stable by 2025, my brand will explore price reductions" during negotiations with the food industry. Leclerc insists on going "into combat mode" to secure cost reductions and combat the effects of inflation.
Leclerc noted the increasing prominence of private labels on store shelves, adding pressure on suppliers to spread their cost increases. Similarly, Alexandre Bompard, CEO of Carrefour, mentioned the company's significant share of Carrefour-branded products, which allows them to offer prices about 30 percent lower than major brands. "Everyone has reasons to increase prices," Leclerc stated, underlining the tension between retailers and the food industry.
Leclerc, skeptical about relying on political action to improve the purchasing power of French consumers, said, "It’s not the law that's going to fix prices." He highlighted the political environment's failure to provide certainty for consumers, resulting in high savings rates among French households. "There is a lack of planning; for example, people aren’t sure if they should buy electric cars due to uncertainty about resale values!" he lamented.
Despite these challenges, Leclerc remains optimistic. He predicted consumers would still spend on celebrations, noting, "Allow yourselves to have a consolation Christmas," which he suggested would help maintain overall consumption levels. This forecast contrasts with predictions from November, where CSA research indicated budgets for Christmas gifts would be roughly 52 euros less than the previous year’s spending.
Positive signs emerged recently as consumer prices saw slight reductions, with November figures showing only a 1.3 percent year-over-year increase. Leclerc commented, "We’ve put an end to the excessive speculative inflation! But it was not monetary policy responsible for lower pasta prices!" He believes inflation rates will stabilize next year, aligning with Bompard's predictions of stable pricing for 2025.
The path to stability, according to Leclerc, necessitates strong involvement from large retailers willing to negotiate aggressively with wholesalers. He directly criticized giants like Unilever and Procter & Gamble for their evasive tactics during these challenging economic times.
Leclerc's frustrations extended to politics, calling out the overall "lack of professionalism" among political leaders. He expressed indifference to joining any government, critiquing how these leaders have disengaged from addressing consumer needs. "The public is growing tired of this political vaudeville, which has driven them to excessive savings during the holiday season," he asserted.
Notably, Leclerc dismissed recent legislative efforts, singling out laws related to hygiene products and sugary foods and stating they offer no real solutions to consumers. These laws were merely introduced to "fill the budget gap" instead of providing enduring support.
Leclerc has called for quicker implementation of measures affecting household budgets, particularly urging for the extension of meal vouchers—a proposal previously included by Michel Barnier but later censured by the government. This complex web of pricing tactics, political disillusionment, and changing consumer habits paints a picture of the current retail climate as Leclerc rallies for favorable conditions for consumers.
Even amid such difficulties, Leclerc remains focused on ensuring prices remain affordable for his customers, alluding to the necessity for major players to tame costs and strategically engage with suppliers. With Leclerc leading the charge for price reductions, consumers may benefit from more competitive pricing, potentially alleviating some of their financial strain as we approach the new year.
