French retailer E. Leclerc has said that it is freezing the price of the country's staple bread loaf, the baguette, for at least four months, as it warned about soaring inflation.
"We commit to freezing the price of the 250-gram baguette at €0.29 for at least 4 months," Michel-Edouard Leclerc, head of the company, told France's RMC radio.
Blaming higher commodity and energy prices, Leclerc reiterated his forecast for 4% inflation in the marketplace this year.
"Inflation is back and Leclerc must try to prevent the rise being passed on to consumers," Leclerc said.
He promised that the company would engage in tough discussions with suppliers in order to keep the price of other basic foodstuffs in check.
Leclerc heads Les Centres E. Leclerc, a cooperative association of about 600 retailers, which competes against Carrefour and Casino. Its low-price policy has helped it become France's biggest food retailer by market share.
Food Price Inflation
Last September, Leclerc warned that food price inflation, coupled with rising rents, transport and utilities costs, are starting to erode the purchasing power of French consumers.
In a post on his blog, Leclerc wrote that constrained spending has has "increased considerably" over the past 20 years, with wages also increasing, albeit not to the same level.
"So even though the incomes of certain demographics have increased, their ability to spend (to have fun, eat better, take vacations, etc.) has decreased," he said.