Carrefour, one of France’s largest supermarket chains, has made the decision to stop selling PepsiCo products due to their increasing prices, marking the latest development in the ongoing conflict between retailers and suppliers over pricing.
Notably, stores have begun displaying notices alongside Pepsi, Lay’s chips, Quaker cereals, and Lipton teas, informing customers that these products will no longer be available for purchase due to ‘unacceptable price increases.’ Once the existing stock runs out, these items will not be restocked on the shelves. Carrefour is also set to remove PepsiCo products from its stores in Italy, Spain, and Belgium.
While Carrefour has not yet provided a comment on the matter, PepsiCo stated that it has been engaged in discussions with the supermarket chain for several months and intends to continue working towards ensuring the availability of its products.
This move by Carrefour reflects an escalation in its efforts to exert pressure on major consumer goods companies to reduce prices, particularly in response to significant cost escalations in energy, commodities, and labor over the past two years. In September, Reuters reported that the supermarket chain had initiated a ‘shrinkflation’ campaign, alerting customers to product size reductions while prices continued to rise, despite a decrease in raw material costs.
Interestingly, food commodity prices such as cereals, sugar, and vegetable oils have experienced a decline over the past year. The UN Food and Agriculture Organization’s food price index for December 2023 was 10% lower than the same month in 2022, with the overall index for 2023 showing a nearly 14% decrease from the previous year’s average.
Carrefour CEO Alexandre Bompard has consistently emphasized the lack of cooperation from consumer goods companies in efforts to reduce the prices of thousands of essential products, despite the drop in ingredient costs. In contrast, PepsiCo CEO Ramon L. Laguarta indicated during an earnings call in October that the company anticipated sustained inflation in its business, which would contribute to ongoing price elevations.
Recent preliminary data revealed a rise in inflation in France, with December 2023 figures reaching 4.1%, up from 3.9% in November. However, food price inflation experienced a slight alleviation, decreasing from 7.7% to 7.1%, as reported by the country’s statistics agency.
These developments underscore the intensifying dynamics between retailers and consumer goods companies in response to the complex interplay of market forces, production costs, and consumer pricing.
