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Retail

Food Price Deflation In France Accelerates, Study Finds

Food price deflation at French hypermarkets and supermarkets rose to 1.45% in October, compared to 1.33% the previous month, according to data from IRI, reported by Barclays European Food Retail Equity Research.

Across both hypermarkets (-1.49%) and supermarkets (-1.50%) there were also signs of accelerating deflation in the French market. Overall, food deflation in October was at its highest level since March 2015.

‘The higher deflation in October is mainly a function of the higher promotional activity during the period, especially in Health & Beauty products (-2.40%)’, Barclays quoted IRI as saying.

‘Although Leclerc implemented its anniversary campaign in October, we believe that this higher promotional activity in France is also related to the new commercial strategy implemented by Carrefour hypermarkets since September to regain traffic (recall Carrefour hypermarkets gained 30bps market share in September, according to Kantar Worldpanel). Food deflation was also high in dairy products during the period (-2.40%)’.

The data indicates that food prices in France are now down by an average of 1.14% since the start of the year.

‘However, we believe that French customers continue to take advantage from this deflationary and promotional environment to trade up,’ said Barclays. ‘Sales growth is in positive territory for national brands since the start to the year, while they’re in negative territory for private labels.’

© 2016 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. To subscribe to ESM: The European Supermarket Magazine, click here.

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