French Carrefour places warning signs of “deflation”.
- Written by Lucy Hooker
- Business correspondent, BBC News
French supermarket Carrefour placed stickers on its shelves this week warning shoppers of “deflation” – where the contents of packages decrease while prices do not.
Lipton iced tea, Lindt chocolate and Veneta ice cream are among the products that have been named and shamed.
Shoppers are told if the bottles are smaller or the contents of the package are lighter.
Carrefour said it wants to put pressure on companies that make the products to keep prices low.
“It is clear that the aim of stigmatizing these products is to be able to demand that manufacturers rethink their pricing policy,” said Stephen Bumpis, Carrefour’s director of customer communications.
Carrefour identified 26 products whose prices were reduced, without cutting prices to match, produced by food giants including Nestlé, PepsiCo and Unilever.
Carrefour said that the Giggos infant formula produced by Nestlé increased from the package size of 900 grams to 830 grams, for example.
The supermarket said a bottle of Lipton Sugar-Free Peach Iced Tea, produced by PepsiCo, had shrunk to 1.25 litres, from 1.5 litres.
The quantity of Vienita, produced by Unilever, has decreased from 350 grams to 320 grams.
Carrefour, France’s second-largest grocer, highlights the products in question with signs on shelves saying: “This product has seen a decrease in volume/weight and an increase in the actual price charged by the supplier.”
Unilever, PepsiCo and Nestlé did not comment on Carrefour’s move.
French retailers and food manufacturers have come under pressure to cut prices, just as in the UK, where shoppers are suffering from sharp price rises.
In June, French Finance Minister Bruno Le Maire summoned 75 retailers and consumer groups to a meeting on prices, and accused manufacturers of failing to comply with inflation.
But UK supermarkets are unlikely to follow Carrefour’s lead, according to retail expert Ged Wouter, because the strategy risks “poisoning” relationships between retailers and food companies.
“This is a very honest way of trying to compete,” he said. “Doing that with your manufacturers, that’s not going to help.”
He added that supermarkets use the same ‘shrinkage’ tactic with their own products, aiming to maintain a certain price point, say £1, by offering cheaper ingredients, or making smaller portions to manage rising costs.
Given this, he added, criticizing brands for doing the same would be like “people in glass houses throwing stones” and would risk being accused of hypocrisy.
A spokesman for Lindt & Sprüngli, another brand identified by Carrefour to reduce its products, said its prices rose on average by about 9.3% in line with rising raw material costs.
The spokesperson said information on product size was always clear.
“We always adhere to labeling laws and regulations that require objective information about the amount of product in a package, including a net weight statement, serving size, and servings statement per container.
“Consumers can use this information to make accurate, informed purchasing decisions about how much product they purchase.”